Approach your insurance decisions from a Loss Control or Safety and Risk Management position. You must determine your needs and state exactly what it is that you want to protect:

Your business? Your Survivors? Your Estate? Your answers will be dependent on your personal and financial requirements and on your long-term goals.
You should strongly consider Life and Disability Insurance if you are married, have dependent children, are caring for an aging parent or have a physically challenged relative who depends on you for support. Your retirement savings are not enough to insure your spouse’s future against a rising cost of living — even if you have a sizable estate and/or you own a business.

Changes in your life require changes in your coverage. Your insurance policies should keep pace with your current needs. Some life changes that may require a policy “tune-up” include: a change in marital status, a new child or grandchild, your child or grandchild requires assistance or long-term care, you or your spouse are in poor health, you recently purchased a new home, you are planning for a child or grandchild’s education, you have refinanced your home mortgage in the past six months and/or you or your spouse recently received an inheritance.

The Benefits of Life insurance are many. It can provide for your loved ones in the event of your death (covers funeral expenses and pays estate taxes) but life insurance can be more than just protection for your family. There are many products and programs designed to help ensure the future of your business, to assist in retaining quality employees, and to help reduce costs. Some programs can insure the continuation of your business after the death of a key employee or to help your heirs pay estate taxes without liquidating your business assets.

Life insurance is a crucial step in planning for your future. Not only can it help fulfill promises made to your family if you are no longer around, but there are several life insurance plans that provide benefits while you are living. The cash value accumulated and borrowed from a permanent life insurance policy can be used to help with large expenses, such as a college education or down payment on a home or business. The growth of a cash-value policy is tax-deferred – you do not pay taxes on the earnings, and the value accumulates until you withdraw funds from the policy. (As with any tax deferred issues, consult your tax advisor or financial planner for more information.)

The vast array of different life insurance products can become confusing. There is: variable life, universal life, decreasing term, credit life, single premium, whole life, endowment policies, and more.

The best way to approach these products is to lump them into two main categories: Term and Permanent. Term Life Policies allow you to shift some of the financial impact of your premature death to an insurance company. The insured’s death must occur within the time specified in the policy for proceeds to be paid to the beneficiary. Term insurance is relatively inexpensive in your younger years with the annual cost increasing as you grow older. Permanent insurance protects against the risk of premature death and allows you to build a cash reserve, like a savings account. Part of your premium goes for the death benefit and the rest is like an addition to an investment account.

Disability Insurance is as important (and in some cases more important) than life insurance. That’s because at any given age the odds of becoming disabled are much higher than dying. Suffering a disability could be a catastrophic event for you, your family, and your co-workers. Insurance provides you with a source of income in the event that you become disabled and are unable to work for an extended period of time. Most policies offer 24-hours a day coverage, both on and off the job, and there may be no limitations for mental disorders or drug and alcohol related disabilities.

There is a “Your Own Occupation” definition of Disability-that says you are disabled if you are unable to perform the substantial and material duties of “your own occupation” — even if you are able to work in another occupation. Ask your insurance agent to further explain this definition and to explain the strengths and weaknesses of Short Term vs. Long Term Disability coverage.

Your premium will be based on these definitions of the plan, your eligibility period, the integration of additional income (workers compensation, etc.) and if the plan range is partial or full. There are some rules of thumb when designing your benefits package: Get the highest monthly benefits for which you can qualify, get “Your own Occupation” coverage, get the longest waiting period you can afford, get coverage for the longest benefit period.

Many businesses have special risks requiring the need for special protection. As a professional, you may face unusual liability issues simply because of the nature of your work and due to these uncertainties standard business insurance simply won’t provide you the coverage you desire. Special insurance programs have been designed for Accountants, Architects, Engineers, Attorneys, Real Estate Agents, Nonprofit Associations and Sales Professionals.

Ask your insurance agent if there isn’t a disability program specifically designed for your business.