Types of Disability Insurance

2008-10-07T08:43:00.000-07:00

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The main purpose of disability insurance is to to replace an individual's income should they be unable to work as a result of either an accident or a sickness. In this article, we will discuss type of disability insurance for business owners.
There are four types of business disability insurance:
1. Business Overhead Insurance.
The insurance helps to pay for the reimbursement of business expenses in case of disability of the insured. Since a business owner is responsible for a variety of fixed expenses. Some examples include rent, salaries of employees and utilities, if the business owner suffers a disability, these expenses continue, but the income-earning capacity of the business may be significantly reduced. This type of insurance provide owner with necessary funds to pay for all above expenses.

2.Disability Buy/Sell Policies
If there are several owners in the business the owners may enter into buy/sell agreements which will govern how the business is dealt with in the event one or more of the owners dies, becomes disabled or suffers a bankruptcy.
The disability buy/sell insurance is designed to assist healthy owners to fund the purchase of a disabled owner's share of the business.
In fact, The likelihood of a long-term disability affecting the business increases as the number of owners in that business increases.

3. Wage Loss Replacement Plans
Wage loss replacement plans are designed to provide the benefits of individual disability policies to key employees, while at the same time maximizing the tax benefits to both the employer and employee.
The policy may also provide that on the retirement or termination of the employee's service, the policy will be assigned to the employee and One benefit of grouping several individual disability policies is that the insurer may provide premium discounts when the same policyholder owns multiple policies.

4. Disability benefits under life Insurance Policies
Two main methods of providing disability income in life insurance policies are:
a)Waiver of premium
The insured will stop paying premium in the event the policy owner becomes disabled during the term of the policy.
b)Combination policies
A policy that is considered exempt allows the cash values in the plan to accumulate on a tax-deferred basis.

I hope this information will help. If you need more information of the above subject, please visit my home page at:

http://lifeanddisabitityinsuranceunderwriter.blogspot.com/
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Disability Insurance 10

Types of Disability Insurance