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SFB099 The Basics of Disability Insurance Part 2: Maximizing Your Benefits

| July 02, 2018
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Episode Summary

In this episode of the two part series on the basics of disability insurance, Paul discusses with Cory about the provisions you should look for in any disability insurance you already have or are considering. They go over the importance of paying attention to the language of the contract and how to maximize the benefit of your disability insurance as well as how group disability contracts may not necessarily benefit high-income professionals or entrepreneurs. Paul and Cory give helpful tips and advice on how to better understand choosing and keeping an insurance policy that best suits you.  

What Was Covered

  • 01:55 - Non-cancelable and guaranteed renewable provisions for disability insurance and why you should look for a unilateral contract
  • 03:15 - The difference between unilateral contracts and group disability insurance
  • 04:26 - What’s important about guaranteed renewable contracts
  • 07:16 - Causes of disability and its likelihood to you
  • 08:05 - What disability companies use to define whether or not you’re disabled
  • 09:13 - Definition of own-occupation insurance policy
  • 13:58 - No disability insurance company will give you enough coverage to fully replace your income
  • 15:12 - Your monthly benefit in life insurance vs disability insurance
  • 15:27 - Elimination period in health insurance vs disability insurance
  • 16:59 - Total cost cash flow wise for you to secure disability insurance
  • 18:16 - Every company offers some kind of increase provision to keep up with inflation
  • 21:48 - What to do if you can’t get every contractual provision that’s important to you due to cash flow
  • 22:44 - Benefit of companies with better residual provisions
  • 25:00 - 60 to 70 percent is the most under traditional means that is coverage of your income
  • 25:41 - What does the typical group disability contract look like from a percentage replacement
  • 27:37 - Looking at the language of the contract
  • 30:35 - If people are bringing value to other people it allows them to live a happier life
  • 31:00 - How is the disability insurance getting paid for and how does it affect you tax-wise
  • 34:33 - What high-income professionals or entrepreneurs should ask their financial advisors

Tweetables

"Unilateral means you put the contract in force and after it’s in force, as long as you’re doing what you’re supposed to do, there is almost nothing the insurance company can do to get out of the provisions."

"The contractual provisions we want of the non-cancelable guaranteed renewables sounds like they can’t cancel it and they must renew it every year and that’s exactly what it means."

"Non-cancelable very specifically means they cannot change a dot on an “i” or a cross on a “t” on that contract including its premiums."

"What you want is a contract that’s so strong that the insurance company’s own contractual provisions compel them to pay a claim in that circumstance."

"No disability insurance company will give you enough coverage to fully replace your income."

"If you’re working with any financial advisor out there and you are a high-income professional or entrepreneur, I think you should ask that advisor how many disability insurance policies did they facilitate their clients getting in place."

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