Disability Income
Insurance
Keep your business running, even when you can't.
Disability Income
Insurance
Keep your business running, even when you can't.
Disability Insurance Overview
Disabilities that impact work can pose challenges for organizations of any size. Disability income (DI) insurance helps replace part of employees’ income if they are unable to work for an extended period due to illness or injury. DI is a useful risk management tool and can also aid in attracting and retaining staff. Connect with a financial professional to learn more about how DI insurance can benefit you and your business.
Features and benefits of Disability Protection
Income Protection for Employees
Group long-term disability coverage often covers only about half of an employee’s net monthly income. You can address this gap by offering supplemental individual DI insurance as a voluntary benefit, providing added financial protection for your employees during a disability with minimal or no cost to the business. DI products exist for both small and large organizations, available as voluntary or employer-paid options that may qualify for simplified underwriting. Employees also benefit from discounted premiums and policy portability regardless of plan type.
Retirement Protection for Employees
Employees may seek to protect their retirement savings, particularly if illness or injury prevents them from working and results in the need to withdraw funds for living expenses. Disability income policies can provide partial income replacement in such situations and may also be structured to help employees continue saving for retirement if they are unable to work for an extended period. Providing disability income policies not only assists employees in maintaining financial security, it also enhances an organization’s ability to attract top talent and foster long-term loyalty.
Protect Your Business and Select Employees
A key employee’s disability can affect a small business financially. Without a pre-arranged plan, continuing salary payments may not be tax-deductible per IRS rules. A Qualified Sick Pay Plan (QSPP), funded by disability insurance (DI) and recognized by the IRS, allows businesses to set policy in advance and transfer some salary risk to the insurer. Owners can select employees for coverage, making QSPPs ideal for family businesses seeking protection for non-owner family members.
Fund Buy-Sell Agreement
If your business has multiple owners, DI can fund a buy-out if a partner becomes disabled, enabling a smooth ownership transition. The insurer acts as an impartial party to confirm disability status. Review your buy-sell agreement to ensure disabilities are properly covered and funded.
Cover Business Overhead Expenses
If you become disabled, your business could face significant financial challenges. A business overhead expense (BOE) disability policy helps keep operations running by covering a portion of business expenses like leases and salaries while you are unable to work. BOE premiums are typically tax deductible, and the benefits paid, though taxable, cover expenses that are usually deductible.
IMPORTANT DISCLOSURES
Supplemental individual disability income insurance may not coordinate with your group long term disability coverage. Claim decisions are rendered independent of each other.
Note: There may be implications under the Employment Retirement Income Security Act (“ERISA”) depending on how disability income insurance policies are made available to the employees and whether such an arrangement constitutes an “employee benefit plan” under ERISA. Employers should consult their own tax and legal advisors for further information on potential ERISA implications.
Policies have exclusions and limitations. Contact us for more information including costs and complete details of coverage.
Product availability varies by carrier, state, and individual eligibility. Not all products listed are available in all states or to all applicants. Product descriptions on this page are for general informational purposes only and do not constitute a solicitation or offer to sell any specific insurance or annuity product. All products are subject to underwriting approval and applicable state insurance regulations. Riders and benefits are subject to additional charges, terms, conditions, and limitations. Variable products involve investment risk, including possible loss of principal, and are sold by prospectus. FundaDream Insurance Solutions, Inc. is a licensed California insurance corporation. Consult the applicable carrier contract for full terms, conditions, and limitations. FundaDream’s charitable giving is made from general corporate revenues at the sole discretion of FundaDream leadership and does not constitute compensation to any licensed insurance professional.
The information provided is not written or intended as specific tax or legal advice. FundaDream, its employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.
Insurance products and services are offered through FundaDream Insurance Solutions, Inc., California License No. 0M95835