KEY PERSON DISABILITY

What about key person disability? Just as with the death of a key employee, there are potentially severe consequences to the business and to the employee, of that employee becoming permanently disabled.

The business could purchase and be the beneficiary of a disability income policy to help off-set the extra expense of replacing the disabled employee and paying continuing compensation during the disability period.
Executive benefits insurance plans provide enhanced income protection for executives and key employees who suffer long term disabilities. Executive benefits plans offer an economical and flexible way for employers to provide sufficient coverage for their valued employees.

What are the odds of having key employees being disabled for twelve months or longer before age 65?

Andrew Carnegie once said:
”You can take away my money and my factories. As long as you leave me my people, I will be where I was within two years.”

Businesses rely on their key employees to keep the business running smoothly. What would happen to the business if a key executive couldn't return to work? How long could the business pay the disabled key employee or owner? Where would the money come from to replace the key executive? The advantages of using disability income to protect a business from the loss of a key executive due to illness or injury are clear. It is also clear that a business should include disability income for its key executives as part of a tax-wise total compensation plan.

RESOURCES

Business:
http://www.360financialliteracy.org/Financial+Topics/Business+Owner/
Articles/Insuring+a+business/Properly+insuring+your+business.htm

Spanish: (Programas de Discapacidad del Seguro Social) :
http://disabilitybenefits101.org/

Statistics:
http://www.ilr.cornell.edu/edi/disabilitystatistics/StatusReports/2007-HTML/2007-StatusReport_US.html?CFID=14653252&CFTOKEN=97062245

Summary of Major Federal Disability Programs:
http://www.afb.org/dirfederal.asp

For a discussion of disability income basics:
http://www.pueblo.gsa.gov/cic_text/employ/
lt-disability/insurance.htm

The benefits of a policy may be income tax free [IRC §104(a)(3)]:
http://www.irs.gov/faqs/faq/0,,id=199752,00.html

Disability income is essential for professionals:
http://www.360financialliteracy.org/Financial+Topics/Protection+Planning/Articles/
Disability+Insurance/The+fundamentals+of+disability+insurance.htm

For additional information about the uses of disability income:
http://lifehappens.org/pdf/printable-consumer-guide/disability-pcg.pdf