| The main purpose of disability insurance is to to | | | | In fact, The likelihood of a long-term disability affecting |
| replace an individual's income should they be unable to | | | | the business increases as the number of owners in |
| work as a result of either an accident or a sickness. In | | | | that business increases. |
| this article, we will discuss type of disability insurance | | | | 3. Wage Loss Replacement Plans |
| for business owners. | | | | Wage loss replacement plans are designed to provide |
| There are four types of business disability insurance: | | | | the benefits of individual disability policies to key |
| 1. Business Overhead Insurance. | | | | employees, while at the same time maximizing the tax |
| The insurance helps to pay for the reimbursement of | | | | benefits to both the employer and employee. |
| business expenses in case of disability of the insured. | | | | The policy may also provide that on the retirement or |
| Since a business owner is responsible for a variety of | | | | termination of the employee's service, the policy will be |
| fixed expenses. Some examples include rent, salaries | | | | assigned to the employee and One benefit of grouping |
| of employees and utilities, if the business owner | | | | several individual disability policies is that the insurer |
| suffers a disability, these expenses continue, but the | | | | may provide premium discounts when the same |
| income-earning capacity of the business may be | | | | policyholder owns multiple policies. |
| significantly reduced. This type of insurance provide | | | | 4. Disability benefits under life Insurance Policies |
| owner with necessary funds to pay for all above | | | | Two main methods of providing disability income in life |
| expenses. | | | | insurance policies are:a)Waiver of premium |
| 2.Disability Buy/Sell Policies | | | | The insured will stop paying premium in the event the |
| If there are several owners in the business the owners | | | | policy owner becomes disabled during the term of the |
| may enter into buy/sell agreements which will govern | | | | policy.b)Combination policies |
| how the business is dealt with in the event one or | | | | A policy that is considered exempt allows the cash |
| more of the owners dies, becomes disabled or suffers | | | | values in the plan to accumulate on a tax-deferred |
| a bankruptcy. | | | | basis. |
| The disability buy/sell insurance is designed to assist | | | | I hope this information will help. If you need more |
| healthy owners to fund the purchase of a disabled | | | | information of the above subject, please visit my home |
| owner's share of the business. | | | | page. |