Category: Business Disability Insurance
Need TDI? HawaiiTDI
Does your Hawaii-based business need Hawaii-state mandated, Temporary Disability Insurance(TDI) coverage? If yes, you’ve come to the best place. We guarantee it.
For the past twenty years, HawaiiTDI has been the market leader. We care about our clients. Call us and you’ll see the difference.
By state law, employers in Hawaii must provide temporary disability insurance (TDI) for their employees. However, state-mandated minimum coverage may not meet the needs of all employers and their employees. We offer competitively-priced TDI plans that fully comply with all state requirements, but we also offer plans that enhance required TDI plans and offer employees income protection beyond basic benefits.
As licensed Financial Advisors, we do a lot more than just ‘insurance’. But if trhat’s all you need, then that’s what we’ll give you. We look forward to having the chance to serve your business needs. Please email, or call today. Aloha and thank you very much!
M. Garrett Wheeler
TDI and Critical Illness Insurance Can Aid in Business Continuation Planning
We all know people who have had cancer, a heart attack or a stroke. In fact, every 19 seconds, someone in the U.S. is diagnosed with cancer. Every 25 seconds, someone suffers a coronary event. Every 40 seconds, someone in the U.S. suffers a stroke.*
I have found that when it “hits home” for people is when it has happened to someone they love. So I’m upfront and direct about the seriousness of not having this protection. I explain to clients who are business owners: Are you prepared for how one of these illnesses might impact not only your future personal plans, but your future business plans? Whatever their answer may be, my main concern is to serve them by helping them get this protection. In doing so, I’ve done my job in bringing it to their attention and offering to help with this type of planning. Of course, the bottom line is that not many of us can afford to say, “It won’t happen to me.”
It is impossible to predict how we might react if diagnosed with a life-threatening condition. Some may choose to return to normalcy as soon as possible, while others may make drastic changes to life and work routines. Others, because of their medical circumstances, have no choice. Critical illness insurance, a specified disease policy that provides a lump-sum benefit amount upon diagnosis of certain medical conditions (as defined by the policy), benefits different individuals in different ways. The proceeds from a critical illness policy can provide needed funds for those wanting to change their lifestyles and financial security for those whose medical conditions prevent them from having much choice.
Have you ever thought about how you would pay your mortgage if you couldn’t work because of an illness?
Following are some business applications where critical illness insurance can help.
Critical Illness and Buy-Sell Planning
With buy-sell planning in the life insurance context, business owners enter into a legal agreement requiring the purchase of their ownership interest upon their death. The most common structures for these agreements are the entity purchase (the business buys the interest) and the cross purchase (the co-owners buy the interest). In these scenarios, life insurance proceeds are used to effectuate the agreement.
Firms also can set up an agreement that is triggered and funded upon the diagnosis of a critical illness. Which type of plan – the entity or cross purchase – is better for a critical illness buy-sell agreement? The answer: It depends.
A cross-purchase agreement using critical illness insurance has the same benefits as the cross-purchase agreement that uses life insurance. The remaining owners have the funds to purchase the shares without incurring precarious debt. Also, they receive an increase in basis equal to the amount they pay for the shares. All of the owners have the security of knowing that, should they be the one to incur a critical illness, they won’t have to accept installment payments or worry that the business will collapse before the purchase price is paid.
An entity-purchase agreement may be the solution if flexibility is the primary concern. With this option, the proceeds would be paid directly to the corporation. The shareholders can agree in advance under which circumstances the critically ill shareholder could or must be bought out. Further, they may also wish to include a “waiting period” to allow the critically ill shareholder the time to decide whether he or she wishes to remain in the business postdiagnosis.
The key to using this strategy effectively is to plan in advance who is to decide whether and when the purchase will be carried out.
Even Large Businesses Need The Human Touch
On a day-to-day basis, I help individuals and their families plan financially for a better tomorrow–from top-tier life insurance and income (disability) protection, to long term care (LTC) coverage and 401(k) planning. They expect and deserve the human touch.
However, many of my valued, existing clientele do not actually realize that I serve entrepreneurial companies and small employer groups (2-15 employees), as well with the same level of personal attention. Businesses are made up of people, so why would the level of service a group gets be any different than that of an individual? As a part of Guardian’s BRC (Business Resource Center), I work with closely-held businesses on a wide-range of financial programs that are geared toward the specific needs of the small business owner—from Buy-Sell Agreements and Key Person Coverage to 401k Programs. But like my own family businesses, most companies are looking to save money wherever they can. And yes, while there is an excellent chance we can get a group a lower rate for their state-mandated TDI coverage, for example, Guardian truly offers a whole heck of a lot more. We presently serve many of Hawaii’s larger employer groups (100+ employees). In fact, on a national level, over 1,400 large group customers are teaming up with Guardian. We provide individualized solutions and exceptional service. From Angie’s List to the San Diego Zoo, our large market customers look to us to be their hands-on provider. We offer:
- A full range of flexible products. Voluntary products. Employer-paid products. With a variety of flexible funding options. Plus, Administrative Services Only (ASO).
- Personal service and support — with a dedicated account representative.
- Seamless implementation. Your implementation manager and team will get you up and running quickly, with no hassles or disruption.
Economic Impact of Disability
The rate of disability among working women in the United States has grown almost twice as fast as the rate among working males during the past decade (over 60 percent and 32 percent, respectively), according to Social Security Administration data. Yet half of women (51 percent) are unprepared to cover their living expenses for three months or more should an accident or injury leave them unable to work, according to the 2008 Worker Disability Planning and Preparedness Study, conducted by the Council for Disability Awareness (CDA).
Two-thirds of Americans are living paycheck-to-paycheck*. This makes the consequences of losing income serious for most workers and their families. The ability of women, in particular, to cope with the financial impact of disability may worsen as household credit card debt is at an all-time high—averaging close to $10,000—and personal savings rates are at an all-time low. To make matters worse, women tend to save less than men, according to the Bureau of Labor Statistics.
“With disability on the rise for both men and women, it’s clear most Americans need to better prepare for an income-limiting disability. But this is especially appropriate for women who are experiencing even higher rates of disability while, in general, being less prepared than men,” says Barry Lundquist, president of the CDA, a nonprofit organization focused on helping the American workforce become aware of the growing incidence of disability.
Financial risks of disability can be severe and long lasting.
Disability is one of the leading causes of personal bankruptcies and mortgage foreclosures in America. During a disability, your ability to earn an income may stop, while increased medical bills and ongoing living expenses can quickly deplete savings and other resources, such as retirement and college savings.
“Workers, and in particular women, who haven’t discussed how they would financially manage their financial affairs if a disability arises should begin to realistically think through what would happen if they were unable to work and earn a living,” Lundquist explains. “Creating a disability financial plan should follow—one that helps estimate the impact that disability would have on personal expenses and where income would come from.”
Lundquist encourages all workers to understand their workplace sick pay and disability benefits. He explains that healthy lifestyle habits like seeing a doctor each year and quitting smoking can pay dividends, because leading a healthy lifestyle can reduce the likelihood of becoming disabled in the first place. “Disability planning and preparedness is critical, especially for working women,” he says.
For more information about the survey and for tools and tips on how to financially prepare for disability, visit the Council’s Web site www.disabilitycanhappen.org.
* Parade Magazine, 2008.
“What is Your Greatest Asset?”
Without hesitation, many people believe that their greatest asset is their home, or their retirement savings. Neither is correct. To be clear, your greatest asset is your ability to earn an income, that is, to make money and bring home a paycheck.
In a nutshell, my job is to help my clients protect their paycheck. My role is to solve a problem, and in this case, risk is their problem. We facilitate the transfer of risk. As I tell my valued clients, “let’s face it, your greatest asset desperately needs to be protected…” It is the foundation on which all of their hopes, dreams and aspirations are built. Without this type of “paycheck protection” coverage, it leaves them vulnerable financially. Continue reading
Is Your Paycheck Protected?
While most people don’t think twice about insuring their cars and homes, they often leave one of their most important assets unprotected—their paychecks. Working Americans rely heavily on their paychecks to support their families and to fund their everyday living expenses, but few consider how their lives would be affected if they were unable to work due to an illness or injury and couldn’t bring home a paycheck. Ask yourself: Could you afford to live without your income?
“Your paycheck is clearly one of your most valuable assets. Just as you insure other valuables in your life, such as your home or car, it is crucial to insure your income,” says Garrett Wheeler, a disability insurance (DI) expert with Guardian in Honolulu, Hawaii. “Think of disability insurance as insurance for your paycheck. It provides an income if you’re unable to work due to an illness or injury.” According to the LIFE Foundation survey, nearly 50 percent of working Americans say they would not be able to make it a month before financial difficulties would set if a disability were to keep them out of work. More than one in four say they would face financial problems immediately. Continue reading