April 2007

Disability Income Insurance: What Every Attorney Needs to Know

BY PAUL ADAMS, CLEARLINE FINANCIAL GROUP

Would you ever show up in the courtroom - or at a client meeting - without properly preparing your case or researching your client’s situation?

Of course you wouldn’t.  In fact, for most lawyers, the idea of being poorly prepared at a crucial moment is the stuff of nightmares.

But no matter how well you prepare your cases, there’s an all-too-common scenario that you may not have anticipated fully: what would happen if you were to become disabled?  Perhaps you believe that you’re fully covered by a group policy your firm has purchased.  However, the truth is that while group disability income insurance is often relatively inexpensive and easy to administer, it can also fall short just when you need it the most - leaving you in for some unpleasant surprises after it’s too late to correct the situation.

Want to be better prepared?  Consider the following:

Learn to speak the lingo:

The right disability income insurance (DI) policy can help you keep your household going, even if you suffer a long-term disability.  But before you go shopping for a DI policy, you need to know what features to look for - and the language the insurance industry uses to describe them. The following terms are part of the language used to describe high-quality policies, and are what you should look for in order to get coverage you can count on:

·        Non-cancellable:  To avoid the possibility of losing your coverage just when you need it most, choose a policy that’s non-cancellable and guaranteed renewable to age 65 - with premiums also guaranteed until age 65.  With group or association group coverage, you run the risk of being dropped and left unprotected at a time in your life when, due to your age or a change in your health, it would be very difficult to qualify for coverage under another provider.

·        Conditionally renewable for life:  Although premiums may increase after age 65, your policy should be renewable for life, as long as you are at work full time.

·        “Own-occupation:”  Own-occupation or “Own-occ” coverage defines “totally disabled” - and therefore eligible for benefits - as being unable, due to sickness or injury, to perform the material and substantial duties of your own occupation even if you are at work in another capacity. As a highly skilled professional who has invested so much in education and training, you want to make sure you have genuine own-occupation coverage - so that even if you can teach, for example, in your field, but cannot practice law, you are still eligible for benefits. Group coverage is rarely true own-occupation coverage.

·        Residual Disability coverage:  Through a rider, a good individual DI policy can provide you with protection against the income loss you may suffer as a result of partial (residual) disability - even if you have never suffered a period of total disability. This kind of residual coverage is not available with most group plans.

·        A choice of “riders:”  Riders offer optional additional coverage such as Future Increase Options, Automatic Increase and Cost of Living Adjustments, or “COLA.”

Take the time to consider upgrading your DI coverage today. You know how valuable it is to be fully prepared in all areas of life. Having the right DI coverage could be vitally important to your economic well-being in the future - and help protect one of your most valuable assets: your ability to earn an income by practicing law.

In the case of DI protection, as in your legal work, a little extra planning and research in advance could prove invaluable at a later date.  The truth is that successful professionals often need far more complete DI coverage than that provided through their firm’s group policy or through association coverage.  How does your coverage stack up? To find out, ask a reputable DI agent for a free consultation - specifically to help you compare your present coverage to an individual, own-occupation policy for professionals, tailored to suit your individual needs.

Paul Adams is the President of Clearline Financial Group.  Clearline Financial Group works with professionals and business owners to accumulate, distribute, and protect the assets they have already built.  He can be contacted at (702) 255-7973 or at paul_adams@clearlinefinancial.com.