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Christopher R. Hibbard, ChFC®, CRPC®, CFS®
Vice President, Wealth Management
Teachers Investment Services
Located at Teachers Federal Credit Union
5439 Sunrise Highway
Holbrook, NY 11741
Phone: 631-698-7000 Ext. 6020
Email: christopher.hibbard@lpl.com
CRPC conferred by College for Financial Planning.
January/February 2025
Disability Insurance for Business
You may be aware that disability income insurance can protect your employees' ability to earn an income should a long-term disability keep them from work. But do you know there is also a type of insurance that may protect a business financially in the same circumstances? It is particularly suited for a smaller company or practice that depends on a few people for most of its ability to operate successfully.
What it Does
When a person crucial to the business's success can't work because of a disability defined by the insurance contract, BOE insurance can step in to cover certain everyday expenses. These expenses can range from employee salaries and employment taxes to mortgage or rent payments, utility bills, and even insurance premiums. The policy will typically have a monthly cap for what it will pay.BOE insurance may have an elimination period of 30 to 90 days or longer before it begins paying benefits. This same feature is in the disability income insurance your employees may have, with longer elimination periods usually resulting in smaller premium payments. Policies typically have a maximum term during which benefits are paid, with the most popular being a year or two, although some are longer. This differs from disability income insurance, from which payments can last until age 65 or beyond, depending on the policy terms. Premiums for BOE are generally tax-deductible, but benefits are taxable. Remember, though, that the benefits typically pay for expenses your business may still deduct.
The Difference
While BOE insurance benefits protect your business financially by paying many fixed expenses, it may not pay for the owner's salary. That's where disability income insurance comes in, an important benefit for all your employees, including the owners.Disability can happen to anyone. According to the Social Security Administration, more than one in four 20-year-olds* will become disabled before reaching retirement age. So, talk to your insurance professional to learn more.
*https://www.ssa.gov/disabilityfacts/facts.html
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Christopher Hibbard is a financial advisor with, and securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Teachers Federal Credit Union (TFCU) and Teachers Investment Services are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using Teachers Investment Services, and may also be employees of TFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of, TFCU or Teachers Investment Services. Securities and insurance offered through LPL or its affiliates are:
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