Disability insurance for the fee-for-service professionals

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PostPosted: Mon Mar 15, 2010 11:03 am   Post subject: Disability insurance for the fee-for-service professionals  

I was chatting with an agent regarding disability coverage for professionals who're earning on a fee-for-service basis. He was trying to explain an unlimited income loss recovery period. Do such coverage really exist for fee-for-service professionals?


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LaymanChris
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PostPosted: Tue Mar 16, 2010 11:11 am   Post subject:   

I guess in today's world disability insurance is a must for all. All professionals e.g. consultants who'd lend their services, attorneys who'd charge their clients, business owners etc. would need disability insurance to curb their professional risks. I'd say this because the income that these professionals generate is largely dependent on their ability to work and are by no means 'fixed salaries'.

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PostPosted: Wed Mar 17, 2010 3:07 am   Post subject:   

You're going to have to elaborate more on what exactly unlimited income loss recovery means in his example.

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PostPosted: Wed Mar 17, 2010 5:03 am   Post subject:   

Disability for professionals like you would not only mean a void in terms of income but it would also curb your potential as you have to build a new client base.

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PostPosted: Thu Mar 18, 2010 6:24 am   Post subject:   

It will be beneficial for you if you have own-occupation disability insurance. But I guess, you'd also need a residual disability benefit rider attached to your disability insurance policy. I'm sure it will take some time to rebuild your client base, and you'd surely need income assistance all this while.



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PostPosted: Thu Mar 18, 2010 2:31 pm   Post subject:   

None of the suggestions made so far really address the issue of coming back to work and needing time to rebuild client base in terms of what feature in a disability product he/she'd be looking for. This would be the policy's recovery period.



An unlimited recovery period would be best upon returning to work as it's highly likely income will be down.

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PostPosted: Thu Mar 18, 2010 8:34 pm   Post subject:   

The answer for the OP is "yes". This is an important benefit for anybody who is self-employed or plans on being so in the future.



Ex. George is a CPA and is an employee in a firm. He makes $100,000 and his policy pays $5,000/month. He gets sick/hurt and is out for awhile. Finally, he is recovered and gets back to work. He will go back to making $100,000 and he won't be disabled anymore.



However, if we change the facts and make George a self employed CPA, while he is out, he may lose all of his clients. Therefore, when he is able to work again, his income won't be $100,000 despite him being 100% healthy. If it is only $30,000, a good policy will pay him 70% of his benefit or $3,500 in this example. Without the recovery period, he wouldn't be getting anything.

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PostPosted: Fri Mar 19, 2010 3:30 am   Post subject:   

Quote:
But I guess, you'd also need a residual disability benefit rider attached to your disability insurance policy.


These residual riders are not always similar and their contract terms may vary considerably. You may only be eligible for this benefit if you've suffered an income loss worth 20% or more.
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PostPosted: Fri Mar 19, 2010 3:17 pm   Post subject:   

The thing to always keep in mind with disability coverage is that it's contract driven. Never shop based upon price. Shop for the best contract. There is typically a reason why one contract is less expensive than another. A bad disability policy is like buying auto insurance that only pays for accidents that happen on a Monday, Wednesday, or Saturday.

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PostPosted: Sat Jul 16, 2011 2:41 pm   Post subject: WOSnuqflNuW  

Big help, big help. And superlative news of cruose.


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