Can Your Business Survive Without You?
Competition, the economy, rising interest rates, legislation… the list of things that can end the life of a small business is long and frightening. Like the old axiom says, “If it was easy, anybody could do it.” However, running a small business is not easy.
Self-made men and women, today’s business owners and entrepreneurs, believe in themselves and their ability to succeed in whatever endear(s) they pursue. While this thinking process is critical to their success in business, it plays a significant role in blinding them to one of the biggest risks every small business owner faces… the risk of becoming disabled by an illness or injury.
If you have Group LTD Insurance through your employer/company, you may think you have adequate coverage. This is a common mistake made by people insured under Group LTD programs. Here are some potential issues:
- Many Group LTD plans cap their benefits. As a result, the high income earners in the company have less than 60% of their income insured. Example: If the maximum benefit you can collect under your Group LTD plan is $6,000 per month, then any employees earning $10,000 per month have less than 60% of their income insured. So an employee earning $20,000 per month is only insured for 30% of their income ($6,000/$20,000 = 30%).
- The definitions of disability contained in Group LTD policies are typically more restrictive than those in Individual Disability Policies. This means that they can pay less benefit under the same claims scenario as an Individual Disability Income policy.
- Even if your bonus and/or commission income is insured under your Group LTD plan, the Group LTD benefits will be inadequate to continue retirement savings during periods of total disability. Once your Disability Benefits begin paying, all contributions to your retirement programs stop. When you reach age 65 and your Disability Income Benefits stop, your retirement accounts may be inadequate to support you and your spouse.
Oasis understands the need of small business owners to protect themselves against a disabling illness or injury and has facilitated the development of Individual Disability Income, Overhead Expense (pays your business expenses during disability), and Retirement Security (insures retirement savings) policies. Oasis PEO clients may be able to purchase these policies at discounted rates and on a modified guarantee issue basis (no physicals, blood tests, or detailed medical histories).