Many lawyers do not have enough financial protection against a disability, especially those earning substantial incomes. Some have no coverage, while others may have a policy whose maximum limit only replaces a small amount of their earnings. Others may not be familiar with the options to supplement their current coverage.
Why do these situations occur? Typical responses are:
1) Fully insuring against disability costs too much; 2) Ineligible due to health history; and 3) Appears to be a complicated, time consuming process.
These concerns, however, can be met with confidence and ease.
Consider a recent case handled through our agency:
Situation: A law firm has 8 partners, each earning $300,000 per year, and a handful of staff with no disability coverage.
The first step was to develop a foundation of coverage with a Group Disability policy (we think we offer one of the best and lowest cost policies available for law firms of 5-25 employees).
Due to the substantial income of the partners, we wrote a policy covering 60% of their income, up to a $10,000 maximum monthly benefit as base income protection. Our product offered ‘Own Occupation with Specialty’ definitions to age 67, no medical underwriting, and no offset for benefits received from individual disability policies. We designed the policy so that benefits were also non-taxable for the partners. Keep in mind, too, group rates are often lower per individual due to multiple lives, so this policy was friendlier on their budget. Having simplified issue without completing lengthy forms made this a hole in one!
However, each partner was still underinsured by approximately $6,000 per month. We addressed this issue by enrolling the 8 partners into a $6,000 non-taxable Multi-Life Guaranteed Issue product, insuring them for nearly 64% of their income! In addition, since all lawyers in the firm participated, there was no medical or financial underwriting, therefore only a census and brief enrollment forms were required.
In short, no matter your income level, solid disability solutions exist for you. With affordable rates and simplified issue, there is no reason to have inadequate coverage.
Ken Hudson is an Insurance Agent with Lawyers Insurance. Contact Ken at 919-447-3363 or firstname.lastname@example.org.