If You Go Down, Will Your Company or Household Go With You?

Whether as a sole proprietorship or small business with active partners, business owners have a lot on their plates. Overall, they must ensure that their investment remains a viable enterprise in all kinds of economic conditions and that their livelihood is financially sound.

But what happens if the owner or key employees become disabled and can no longer help generate revenue to pay the bills? And how will these individuals cover their own, personal expenses with no income while they are out? How will any caregivers be compensated? Will the mortgage be paid?

These and related, crucial questions point to the need of disability income insurance. Debilitating injuries or diseases can strike anyone at any time and can spell disaster for unprepared individuals and their companies.

According to the Council for Disability Awareness, disability is the number one reason for bankruptcies and foreclosures. These risks can be controlled by today’s business people and by individuals working for others.

Only about 25-percent of employed Americans have disability income insurance, mostly through their companies. However, company-paid disability plans often have significant limitations or restrictions such as only covering 1) certain types of disabilities, 2) portions of salaries for designated periods of time, 3) basic compensation, but not bonuses. Moreover, the cash benefits received may be taxable, leaving the “covered” individual with far less than expected to maintain their lives while incapacitated.

Relative to other types of insurance, obtaining disability insurance can be expensive and underwriting can be a challenge. Financials, age, relative health, gender, and other factors all come into play; however, the overriding question to ask yourself: Do I need an income to cover my expenses and/or protect my company, if something happens to me?

Discuss your personal and business needs for insurance protection with a qualified financial advisor and make sure your company or household doesn’t come down, if you do.

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About the author: About Ronald Bernheim, the owner of Financial Freedom Wealth Management Services, in Chatsworth, CA. He offers a free, no-obligation counseling session to determine whether a financial review or comprehensive plan is indicated. Interested parties may call (818) 626-9498 or e-mail ronald.bernheim@lpl.com or visit the website at www.ronaldbernheim.com.

Disclosure: All information herein has been prepared solely for informational purposes, and it is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading strategy. Securities and Advisory services offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC. The LPL Financial Registered Representatives associated with this site may only discuss and/or transact securities business with residents of the following states: California, Arizona, Florida, Washington