What Financial Advisors and Planners Need to Know About Long-Term Disability Insurance

At Disability Insurance Law Group, our nationwide claims attorneys have represented financial advisors and planners for more than 50 combined years. As a financial advisor or planner, we understand you spend your career helping clients safeguard their income and build solid economic foundations for the future.

But have you taken the same steps to protect yourself? Your ability to earn an income is one of your greatest assets, and having comprehensive long-term disability insurance (LTD) coverage is essential for maintaining your financial security if you’re ever unable to work due to a disability.

Your Income is Your Most Important Asset

As a financial advisor or planner, you know better than most the importance of protecting valuable assets. Yet, many professionals overlook one of their most important assets—their ability to earn income. Long-term disability insurance ensures that if an illness or injury prevents you from working, a portion of your income will be replaced, allowing you to continue meeting your financial obligations without depleting your savings or jeopardizing your future goals.

Without this safety net, a long-term disability could lead to significant financial strain, forcing you to draw down retirement funds or make other costly sacrifices.

Employer-Provided LTD May Not Be Enough

If you’re relying on employer-provided disability coverage, reviewing the terms carefully is essential. Group policies typically provide limited benefits, often capping the amount at a percentage of your salary, and may not cover bonuses, commissions, or other critical compensation components. As a financial advisor or planner, your income may include various streams, and a standard group policy might not fully replace the income you stand to lose.

Consider supplementing your employer-provided coverage with an individual policy that reflects your total income and offers more robust protection.

Understanding Own Occupation vs. Any Occupation Coverage

For professionals like financial advisors and planners, the type of disability coverage you choose can make a significant difference. “Own occupation” policies are particularly beneficial, as they provide benefits if you cannot perform the specific duties of your job. This means that even if you could work in another capacity, your LTD benefits would continue as long as you can’t perform the work of a financial advisor.

In contrast, “any occupation” policies only pay benefits if you cannot perform any job for which you are reasonably qualified. For high-earning professionals, an “own occupation” policy is often the best choice to maintain your income during a disability.

Supplementing Coverage with Residual or Partial Disability Benefits

As a financial advisor or planner, even a partial disability could impact your ability to work at total capacity, reducing your income significantly. Many LTD policies offer residual or partial disability coverage, which provides benefits if you can work part-time or in a limited capacity but are still experiencing an income loss due to your disability.

This feature is particularly valuable for professionals who may still be able to meet with clients or manage some aspects of their business but can’t maintain their full workload or earning potential.

Customizing a LTD Policy to Fit Your Needs

Just as you tailor financial plans to meet the specific needs of your clients, it’s essential to customize your long-term disability insurance policy to fit your unique situation.

Consider factors such as:

• Elimination Period: This is the waiting period before benefits begin. Choosing the suitable elimination period depends on your ability to cover expenses in the short term, as longer waiting periods typically lower premiums.
• Benefit Duration: Ensure that your policy covers you for as long as you need. Some policies provide benefits for a few years, while others last until you reach retirement age. For financial professionals, a more extended benefit period is often ideal.
• Income Replacement Percentage: Choose a policy that replaces a sufficient portion of your income. Many policies cover between 50% and 70% of your pre-disability income, but you may want to opt for higher coverage to protect your financial security fully.

Protecting Your Own Financial Plan

You likely have a well-thought-out financial plan as a financial advisor or planner. But have you factored in the potential for long-term disability? Without LTD insurance, a sudden disability could force you to liquidate assets, delay retirement, or take on debt to cover expenses.

Long-term disability insurance provides peace of mind, knowing that your financial plan remains intact even if an unexpected disability occurs. It allows you to maintain your lifestyle, continue saving for the future, and focus on recovery without the added stress of financial insecurity.

Consult with Our Nationwide Disability Insurance Claims Attorneys

If you have questions about your existing LTD coverage or are facing challenges with obtaining benefits, working with our disability insurance attorney can help you review policy details, understand the fine print, and assist in filing claims.

For financial advisors and planners, experienced legal support can significantly improve coverage quality and the success of a potential claim. Contact our dedicated nationwide disability insurance claims attorneys by calling (954)-989-9000 or online to schedule a free and confidential case assessment.

We can use our over 50 years of combined experience to help ensure that your application meets the required standards and effectively communicates the need for disability benefits.

Related Links:

• • Disability Insurance Tips for Financial Advisors and Planners
  • Navigating Disability Insurance: A Guide for High-Net-Worth Individuals
  • Individuals with Disabilities: Five Tips for Crafting Your Financial Plan
  • Residual Disability Benefits in Private Disability Policies: What to Know About It
  • Discover the Power of Disability Insurance: 6 Ways to Enhance Your Financial Plan