CFW - Health and Disability
WORKBOOK:
HEALTH & DISABILITY
Health and Disability Workbook Disability Insurance “Over 37 million Americans are classified as disabled; about 12% of the total population. More than 50% of those are in their working years, from 18-64.” ~ The Council for Disability Awareness Disability Insurance is designed to cover your income if you become unable to work.
Types of Disability Policies Different types of disability insurance cover income-replacement needs including: Loan disability. Provides relief on loans if you become unable to work. Buy/sell agreements and buyout coverage. Allows one partner to have the resources to buy out another partner who has become disabled. Personal disability. Covers your personal income. Business overhead expense. Covers business overhead expenses such as employee salaries, rent and operational expenses if a business owner becomes disabled.
1 Copyright © Wealth Factory. All Rights Reserved
Important Disability Policy Provisions Different types of provisions exist in each disability policy. The following are some of the most important provisions to understand in your policy: Own Occupation vs. Any Occupation. Specifies whether you are eligible for benefits based upon your ability to perform the same occupation you had before becoming disabled, or whether you are totally disabled and unable to perform any other occupation. Elimination Period. How long it takes before a policy begins paying you after a disability event. Cost of Living Adjustments. An increasing benefit that adjusts to keep up with the changing cost of living (inflation). Future Increase Riders. Allows you to buy more insurance as your income increases without proof of insurability. Residual Riders. If you can work, but not at the same level as you did in the past, this would give you a partial benefit.
“90% of new long-term disability claims are caused by illnesses rather than accidents. Fewer than 5% are work-related.” ~ The Council for Disability Awareness Property value assets only have value because of the people who utilize them. Therefore people are the true assets. Yet far too often people insure their “stuff” but not themselves. In our opinion, insurance that covers the human being is far more important that merely covering financial assets.
2 Copyright © Wealth Factory. All Rights Reserved
The 4 Main Considerations of a Disability Policy 1) Definition of disability. The policy requirements to qualify for disability benefits from the policy. The ideal definition is “own occupation” which means that if you cannot perform your original occupation after you become disabled (even if you can perform other occupations) then you will continue to collect your full disability benefits. 2) Is it individual or group disability? Group disability policies often have the most generic definition of disability and it may work against you. Additionally, there are no guarantees of what it costs, it may not be portable, there may be caps on the amount the group can receive, plus benefits can be changed or even cancelled. 3) Is the insurance company reputable? Find a company with a good track record and ratings that will be stable and reputable. 4) Amount of the coverage. How much the policy will pay if you become disabled.
“One in eight workers will be disabled for five years or more during their working careers.” ~ The Council for Disability Awareness
Common Mistakes Made with Disability Insurance Forgetting about or forgetting to review and update disability policy on a regular basis.
3 Copyright © Wealth Factory. All Rights Reserved
Improper tax filing that limits the amount of insurance you can qualify for (placing it on the wrong schedule so that it is not earned income). Not getting enough disability insurance to properly protect you in the event of making a claim.
Health Insurance The health insurance landscape has continued to change due to pricing, new laws, and changes in the way that health insurance works. With these constant changes it is important to review your policy regularly to update coverage and keep competitive pricing. A policy that has evolved and can be a great solution is a Health Savings Account (HSA). An HSA account is where you can deposit money pre-tax and then use it to pay for qualifying health related needs (massage, dentist, vision, etc.) without having to pay taxes on the money. This is known as a high-deductible plan that has health insurance coverage attached to it.
Common Health Insurance Mistakes Not paying attention to changes happening in health insurance to be sure you are analyzing your coverage properly. Overpaying on premiums because you’ve stayed with a policy too long or something changed in your policy. Not purchasing a policy that is efficient by being either over-insured on the minor things or underinsured based on how frequently you use the policy or the health issues you have in your family.
4 Copyright © Wealth Factory. All Rights Reserved
Health-Insurance Tips for Employers Evaluate the attitudes of your employees to see if your people are appreciative, indifferent, entitled or otherwise. Don’t pay 100% of your employees' insurance. This often backfires and creates an entitlement mentality. Before you offer a plan to your employees, be sure you understand how much it will cost to offer insurance. On the other hand, you must also consider what it may eventually cost you (or your business) if you don’t offer coverage.
Health-Insurance Tips Be sure to purchase a plan that meets your needs and covers you in areas you want to be covered, but doesn’t have excessive benefits in areas where you feel you don’t need coverage. Consider a plan with a Health Savings Account component. If you’ve put a plan in place with an HSA, be sure to fund the plan before you need it. Don’t purchase coverage for things that won’t affect you if they aren’t covered.
5 Copyright © Wealth Factory. All Rights Reserved
HEALTH & DISABILITY
Health and Disability Workbook Disability Insurance “Over 37 million Americans are classified as disabled; about 12% of the total population. More than 50% of those are in their working years, from 18-64.” ~ The Council for Disability Awareness Disability Insurance is designed to cover your income if you become unable to work.
Types of Disability Policies Different types of disability insurance cover income-replacement needs including: Loan disability. Provides relief on loans if you become unable to work. Buy/sell agreements and buyout coverage. Allows one partner to have the resources to buy out another partner who has become disabled. Personal disability. Covers your personal income. Business overhead expense. Covers business overhead expenses such as employee salaries, rent and operational expenses if a business owner becomes disabled.
1 Copyright © Wealth Factory. All Rights Reserved
Important Disability Policy Provisions Different types of provisions exist in each disability policy. The following are some of the most important provisions to understand in your policy: Own Occupation vs. Any Occupation. Specifies whether you are eligible for benefits based upon your ability to perform the same occupation you had before becoming disabled, or whether you are totally disabled and unable to perform any other occupation. Elimination Period. How long it takes before a policy begins paying you after a disability event. Cost of Living Adjustments. An increasing benefit that adjusts to keep up with the changing cost of living (inflation). Future Increase Riders. Allows you to buy more insurance as your income increases without proof of insurability. Residual Riders. If you can work, but not at the same level as you did in the past, this would give you a partial benefit.
“90% of new long-term disability claims are caused by illnesses rather than accidents. Fewer than 5% are work-related.” ~ The Council for Disability Awareness Property value assets only have value because of the people who utilize them. Therefore people are the true assets. Yet far too often people insure their “stuff” but not themselves. In our opinion, insurance that covers the human being is far more important that merely covering financial assets.
2 Copyright © Wealth Factory. All Rights Reserved
The 4 Main Considerations of a Disability Policy 1) Definition of disability. The policy requirements to qualify for disability benefits from the policy. The ideal definition is “own occupation” which means that if you cannot perform your original occupation after you become disabled (even if you can perform other occupations) then you will continue to collect your full disability benefits. 2) Is it individual or group disability? Group disability policies often have the most generic definition of disability and it may work against you. Additionally, there are no guarantees of what it costs, it may not be portable, there may be caps on the amount the group can receive, plus benefits can be changed or even cancelled. 3) Is the insurance company reputable? Find a company with a good track record and ratings that will be stable and reputable. 4) Amount of the coverage. How much the policy will pay if you become disabled.
“One in eight workers will be disabled for five years or more during their working careers.” ~ The Council for Disability Awareness
Common Mistakes Made with Disability Insurance Forgetting about or forgetting to review and update disability policy on a regular basis.
3 Copyright © Wealth Factory. All Rights Reserved
Improper tax filing that limits the amount of insurance you can qualify for (placing it on the wrong schedule so that it is not earned income). Not getting enough disability insurance to properly protect you in the event of making a claim.
Health Insurance The health insurance landscape has continued to change due to pricing, new laws, and changes in the way that health insurance works. With these constant changes it is important to review your policy regularly to update coverage and keep competitive pricing. A policy that has evolved and can be a great solution is a Health Savings Account (HSA). An HSA account is where you can deposit money pre-tax and then use it to pay for qualifying health related needs (massage, dentist, vision, etc.) without having to pay taxes on the money. This is known as a high-deductible plan that has health insurance coverage attached to it.
Common Health Insurance Mistakes Not paying attention to changes happening in health insurance to be sure you are analyzing your coverage properly. Overpaying on premiums because you’ve stayed with a policy too long or something changed in your policy. Not purchasing a policy that is efficient by being either over-insured on the minor things or underinsured based on how frequently you use the policy or the health issues you have in your family.
4 Copyright © Wealth Factory. All Rights Reserved
Health-Insurance Tips for Employers Evaluate the attitudes of your employees to see if your people are appreciative, indifferent, entitled or otherwise. Don’t pay 100% of your employees' insurance. This often backfires and creates an entitlement mentality. Before you offer a plan to your employees, be sure you understand how much it will cost to offer insurance. On the other hand, you must also consider what it may eventually cost you (or your business) if you don’t offer coverage.
Health-Insurance Tips Be sure to purchase a plan that meets your needs and covers you in areas you want to be covered, but doesn’t have excessive benefits in areas where you feel you don’t need coverage. Consider a plan with a Health Savings Account component. If you’ve put a plan in place with an HSA, be sure to fund the plan before you need it. Don’t purchase coverage for things that won’t affect you if they aren’t covered.
5 Copyright © Wealth Factory. All Rights Reserved
