In-order to help ensure that you protect and preserve all that you have worked to create: your home,
lifestyle, retirement, children, etc, Great North Insurance has partnered with knowledgeable Disability
Insurance carriers. Our team works closely with you to provide high quality, highly competitive
strategies, and protection. Great North Insurance will work along the side of your financial advisor. We
will work together to cover you and your family so when you need it the most, you will feel confident
about your choices and your future. Disability insurance is a critical base for the building blocks that
form your comprehensive financial strategy. We believe our clients should know how important it is to
protect themselves and their family.
If you are earning an income, your current benefits should be fully reviewed to ensure that appropriate
coverage is in place for you and your family. It is common for employees to have some form of group
coverage that may not completely protect your income. This is where Great North Insurance can help.
We will work with a variety of professionals in the disability insurance marketplace and help provide a
detailed comparison to help you make the best decision for your situation.
Great North Insurance helps guide clients from all walks of life; individuals, large groups, professionals
and business owners utilizing a variety of outlets to ensure our clients are in the best hands.
Disability Insurance for Business Owners
Business Loan Protection
There are many ways to get into business or to expand the business you are in. One of the quickest
ways is to get a Business Loan. Many times a banking institution or a 3rd party lender may require that
you have Disability Insurance to protect you from defaulting on a loan if a disabling injury or illness were
to occur. Business Loan Protection can pick up your payments where you left off ensuring your credit
and your business stay intact while you are recovering. If you never recover then you can rest easy
knowing that your loan will be satisfied even if you never continue to work in that business again.
Business Overhead Expense Replacement
Every business has some sort of overhead expenses. This could include a mortgage or lease payment,
employee salaries and benefits, short-term equipment loans, insurance premiums, and much more. If
you became disabled, how would you pay your employees? And for how long? Could your business
stay in the space it’s in? Would a bank be willing to loan you any money if you were disabled? These
are questions business owners face in the wake of a disabling injury or illness. Business Overhead
Expense Replacement (BOE) insurance can help cover those expenses. BOE is designed to buy you
TIME. Time to determine if you will be able to recover and return to work, ensuring your employees are
paid and bills are managed so the business can continue to operate when you come back. In the worst
cases, it buys you time to develop an exit strategy so you can find a suitable buyer for your business or
assets at fair market value.
Buy/Sell Agreement Funding
When partners start or begin business relationship together, it is a good idea to have a Buy/Sell
Agreement established. This agreement will identify what happens to an owner’s share of the business
if departure is necessary and at what terms the sale of those shares take place. This agreement will
typically establish guidelines around Death, Disability, Disagreement, Divorce, and a Desired Exit. The
agreement itself is designed to determine when an exit by an owner will take place and how the
valuation of the shares are calculated so a fair transaction takes place. What it does not address is how
the transaction is funded. Of all the “D’s”, Disability is by far the most difficult to deal with. If one of the
owners become sick or injured two things become of concern:
- Who will determine if the owner is disabled? The injured owner or the partner(s)?
- If the disabled owner must leave, how will the sudden need for funds become available to fund
the transfer of ownership?
The use of disability insurance will provide a funding mechanism that pays for the buy-out without
causing the other owners to come up with personal cash and without forcing the business to dip into
cash-flow. The decision, as to whether or not the owner is disabled, is now transferred to the insurance
company so the owners don’t have to determine this for themselves, avoiding any conflict or lawsuits.
Disability Insurance for Employers
Group Long-Term Disability Insurance
Quality employer offered benefits are among the most appreciated aspects when evaluating job
satisfaction. Group Long-Term Disability Insurance is one of the most valued benefits next to health and
retirement because employees understand the importance of having a pay check. Even though this type
of policy is typically employer paid, it can be designed in a way to maximize the efficiency of the policy
and yet keep costs down for the employer by doing a combination of employer/employee paid benefits.
DID YOU KNOW: You can create a Group LTD policy with as few as 2 employees.
Executive Benefits – “Carve-Out”
Anytime an employer can offer unique benefits that the employees value, it will raise employment
satisfaction and company loyalty. In particularly, compensating your executives for their hard work and
loyalty can be difficult, especially when funds may be tight. Through an Executive Benefit Carve-Out
plan, you can carve out those key employees that you wish to offer unique benefits to using disability
insurance. The premiums for coverage are marginal and can be deducted by the company, but the
benefits received if a disability occurs will pay them tenfold compared to if you paid them the premium
amount in the form of cash bonuses.
Guaranteed Issue Coverage
One of the greatest challenges in obtaining individually owned insurance is qualifying based on health.
One of the biggest deterrents to owning individual insurance is the lengthy process of going through
medical underwriting and the risk of having specific conditions excluded from coverage. Nearly 1 in 10
individuals will not be eligible for coverage on their own. Another 3 in 10 will have some sort of
exclusions because of a health condition. As an employer, you can offer individually owned disability
insurance on a Guaranteed Issue basis, meaning NO medical history reviews or exams and NO
exclusions. This could be employer or employee paid depending on the size of your company. The
process to set this up is very easy and the enrollment process for employees is even easier.
Every employer relies on their key employees to be productive and drive revenue. What would happen
if one of those key employees were to become disabled for an extended period of time? Key-Person
disability insurance is a product designed to compensate the Employer when a disability happens to a
key employee. It typically pays a lump-sum benefit and the cash can be used for whatever is necessary
to offset the costs of losing your employee. Not only would the cost of replacing that person be
expensive and time consuming, but the costs due to lost productivity and retraining could also affect the
‘bottom line’. And what about the costs associated with lost knowledge, skills, and relationships or the
cost of PR to ease the minds of customers? After-all is said and done the costs could be hundreds of
thousands, so the loss of a key employee is a risk worth insuring.
Disability Insurance for Individuals
Your greatest asset is your ability to show up to work and earn an income. Your income pays for your
bills, your lifestyle, and even your future. Your income drives your entire financial livelihood and
without it, what would you do? Disability Insurance helps replace your income during times of injury or
illness that prevent you from being able to work. But not all disability insurance is created equally (read
our advisor articles to learn more). In fact, disability insurance can be VERY complex and difficult to
compare between companies.
Did you know?
- 1 in 4 people entering the workforce will experience a disabling injury or illness for longer than 90
days before age 65.
- The average paycheck received from Social Security Disability is $1,148 in 2014, which is $13,776
per year. The poverty line for a 2 person household was $15,730.
Retirement Savings Protection
When a disabling injury or illness occurs, the first thing that usually goes to the wayside is your
retirement savings. The recommended contribution to retirement can be anywhere between 10-20%
(consult your advisor). This may include your own contributions or contributions by your employer
through a 401k matching program or the like. Disability Retirement Protection can help replace what
you and your employer were contributing to your retirement prior to disability so that you can stay on
track with your planned retirement and prevent having to delay your Golden Years.
1 Council for Disability Awareness- http://www.disabilitycanhappen.org/chances_disability
2 Office of The Assistant Secretary for Planning and Evaluation – http://aspe.hhs.gov/poverty/14poverty.cfm