Are Your Benefits Enough?
Oct 31, 2017 02:32PM
● By Colleen Callahan
With the high cost of housing in our community, many more people live paycheck to paycheck and often have little savings. What happens if someone becomes too sick or hurt to work? What happens when the paycheck ends? In the past year, we have faced this issue with several clients as the result of tragic, unexpected health changes.
Ask if your employer offers a long-term disability plan. Make sure you understand the benefit and check to see if you can purchase additional protection, either through the employer or with the help of an independent agent.
In many cases, employer sponsored benefits are simply not substantial enough. Most employer plans will replace 60% of income, bonuses, commissions, and incentive payments, which are normally excluded. If the employer pays the premium, the benefit is taxable, which reduces the value of your benefit. Additionally, the waiting period for benefits to begin could be 90 days, and that means the check will not arrive for 120 days -- a long time to wait for a paycheck.
Frequently a business owner does not realize the policy does not cover all of their earnings. If you are an owner or a highly compensated employee, take a careful look at the benefits. You might be surprised by the gaps. There is a solution. One can layer an individual disability plan on top of employer coverage. The individual policy requires the applicant to qualify with good health and proven financial need.
If you have a business partner, does your agreement mention what happens in the event of death or disability? Make sure the issue is clearly addressed and the proper amount of insurance is in place. Take the time to do this; it will help your family.
Feel free to call me with questions. I can help.
Colleen Callahan, CLU, CASL, LUTCF.
Colleen Callahan Insurance Services
is located in Pleasant Hill. Contact her
925.363.5433 or [email protected]