Answers to Important Insurance Questions Part I: Personal & Business Disability Why Buy Disability?
Life as you know it can change in a matter of minutes. Please consider that, married or single, disability is your most important insurance coverage. You need it to survive a disability without losing your home and your other assets. We spend a good portion of our adult lives saving and planning for our retirement, our children’s college education, even our death. We're bombarded with information and advice on how best to plan for these events so we arrive well equipped to deal with the eventuality. And then, in minutes, it may all change. Surprisingly, despite all that planning, disability insurance is often left out of the equation. It's thought of as something unaffordable or unnecessary - or something we just don't want to think about because it brings to mind a vulnerability we'd rather not face. But many of us must face it. Unfortunately, your chances of becoming disabled are greater than you may think. At age 45, you have a one in five chance of being disabled--with the average disability lasting over four years, the Society of Actuaries reports. How would you support yourself if you couldn't work? The simple answer: protect your personal income with disability insurance. While disabled, you will receive tax-free dollars every month to help replace your current income. That covers personal disability coverage but what about business disability for your firm? Most firm owners and managers know to protect against the risks of fire, theft, and lawsuits. But what about ensuring the continued, uninterrupted flow of your business should illness or injury strike? If you become unable to work for a period of time, expenses still exist – rent or mortgage, utility costs, salaries and benefits are only some examples of the monthly expenses which need to be protected so your firm can continue to function until you return.
How Much Monthly Disability Insurance Is Adequate?
Personal Disability: A simple rule of thumb is the secure monthly disability insurance equal to your takehome pay, plus pension contributions normally made each month. If your salary is $100,000 and the aftertaxes net about $60,000, this equates to $5,000 a month needed in disability coverage. Disability insurance guarantees this income. Companies usually insure an individual for up to 65% of one's annual salary. The most commonly purchased plan has a 90-day waiting period and a benefit period extending to age 65. The maximum monthly benefit you may apply for in the AIA Plan is $5,000. The plan covers disabilities due to accident or illness in addition to permanent, total and partial disabilities, with variable elimination periods. Business Disability: The amount of coverage you’ll need to protect your firm will depend on your overall fixed and variable expenses. In most cases, during a disability, certain office expenses can be limited. But the majority of overhead expenses will likely continue. With AIA’s Business Overhead Expense Plan, you are able to choose up to $10,000 in monthly cash benefits, payable directly to you, with a choice in benefit periods. Some of the typical expenses covered are: rent/mortgage, employee salaries, principal and interest on business loans, taxes, insurance premiums, and more.
The AIA TRUST Has the Solution
The AIA Trust Long Term Disability Income Plan and Business Overhead Expense Plan is offered to AIA members working at least 20 hours per week, under age 60, who are U.S. residents. They are underwritten by New York Life Insurance Company, which has been given the highest ratings possible. Applying for coverage is simple by calling the AIA Trust Insurance office at 800-255-8215.