Disability Insurance

Why ? Professional Income Individual Disability Income Practice/Business Overhead Expense Retirement Protection Key Person Disability Buyout

Why ?

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One of the core elements of a sound financial plan is having consistent cash flow to support the essential day to day expenses of everyday living. Should that cash flow be interrupted by illness or injury your lifestyle and financial plan may collapse. This is where a high caliber disability plan is of critical importance - it is a policy that replaces your income while disabled and provides financial security. The odds of becoming disabled are staggering – disabilities are the leading cause of mortgage foreclosures.



Professional Income



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Professional Series policies are designed and well suited to provide long term disability income protection to fee-for-service professionals, consultants, as well as high income executives who work in a corporate setting. This policy allows for extensive customization through the generous availability of options – including Own Occupation definition, Cost of Living Protection and Guaranteed Insurability to name a few. Benefits under this policy are paid out monthly, typically on a tax free basis. One of the key components of this contract is the built-in guarantee that assures policy definitions cannot be changed. Furthermore the premiums are locked-in to age 65 (unlike car/home insurance) and only you, the policyholder, has the right to modify the policy, not the Insurance Company. We at Professionals’ Insurance Centre are completely familiar with the many choices available in today’s marketplace and have the knowledge and skill to align you with the right product through the right company.



Individual Disability Income



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Many self-employed and middle income employees have either minimal income replacement protection or none at all. It is equally important for these individuals to protect their earnings. There are a variety of quality choices available where one can build a policy specific to their needs – for example, long-term or short term partial disability, enhanced definition of disability etc. These policies are similar to Professional Series policies in that policy provisions and premiums are fully guaranteed to age 65.



Practice/Business Overhead Expense



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As a self-employed professional or business owner you are fully aware that running your business comes with a cost. You have a financial responsibility to pay rent, employee salaries, telephone and other fixed monthly expenses. In the event that you become disabled these fixed cost do not disappear and will continue. How will you pay these costs? Will you use your personal disability plan that was intended for your family, will you use savings, or will you increase your line of credit? Clearly these are not ideal options when you can easily insure these expenses with a Business Overhead Policy. The premiums are very competitive and tax deductible. A business overhead policy will reimburse your fixed costs allowing the business operation to continue until you can return to work or make a decision regarding the future of the business.



Retirement Protection



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The purpose of this policy is to ensure that your financial plan is complete. Personal disability policies pay benefits to age 65 – what happens after age 65, where will your income come from? It is assumed that your Retirement Savings will have grown sufficiently to generate the level of monthly income required during retirement. However, if you experience a disability during your career you may not have accumulated enough capital to produce the desired level of income. A Retirement Protector policy is an ideal complement to income protection as it will provide up to $1,500 per month (non-taxable) in addition to your personal disability policy benefits while disabled. This sum will be paid into a trust account and ear-marked for retirement planning purposes. This benefit may also be added as an option to your personal disability contract.



Key Person



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The Key Person Protector Plan was developed to provide coverage for a financial loss to an employer due to the disability of a key employee. A Key employee possesses knowledge, skills, or talent that few can duplicate. Therefore attempting to replace this employee would pose a substantial challenge in day to day operations and lead to financial losses.



Disability Buyout



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Disability Buy Out policies are designed primarily for partnerships and professional corporations comprised of two to five principles. Typically buy/sell agreements specify what will take place in the event one of the partners either dies or becomes long term disabled. Having the agreement in place is one issue, funding the agreement is another matter which should not be overlooked. This policy provides the funding mechanism necessary to buy out the disabled partner’s shares.