Expect the unexpected: Protecting your business & life
You may have spent years building and nurturing your business, but it’s always a good idea to think ahead. Is your foundation strong enough to weather unexpected changes in the years to come?
Consider what might happen if a disabling illness or injury left you—or another owner or key employee—too sick or hurt to work. How would it affect your business? Your employees?
Personal Income Protection & Benefit Planning
If you were too sick or hurt to work, would you be able to meet your current financial obligations and maintain your standard of living? It’s important to ensure you have the right protection in place.
Individual Disability Income (DI) insurance provides personal income protection that pays monthly benefits for daily living expenses if you become disabled and unable to work. Think of it as insurance for your paycheck.
The same goes for your employees. Individual DI insurance can be offered as part of your benefit program in stand-alone form or along with group long-term disability insurance; you can also opt to make coverage voluntary, or offer it as a benefit paid for by the company.
Retirement Savings Protection
When you’re unable to earn an income due to a disability, your retirement savings are likely to fall by the wayside. Coverage is crucial to help keep you from compromising your long-term financial wellbeing.
DI Retirement Security1 helps you continue to save for retirement in the event of a qualifying disability, paying benefits directly to an irrevocable trust and then investing them on your behalf, using an asset allocation model based on your investment style and risk tolerance.2 Trust assets are paid as retirement income at the end of the policy’s benefit period.
As a business owner, you worry not just about the impact a disability could have on your personal finances, but also about how it might affect your business. Certain coverages are key to ensure your business is protected, no matter what happens to you.
Overhead Expense insurance helps keep your business running smoothly by reimbursing fixed business expenses, such as rent and employee salaries, until you can return to work. It helps protect your assets, prevent a drain on business capital, and ensure the valuation of your business remains strong.
The Business Loan Protection rider3 helps cover business-related loan obligations, such as the purchase of an existing practice or business or expensive equipment.
Key Person Replacement insurance protects your business against the loss of a critical employee due to a disability, helping to offset any revenue gaps, as well as recruitment or temporary staffing costs.
If a disability is permanent—for you or another owner or business partner—you’ll need to rely on a solid contingency plan.
Disability Buy-Out insurance funds a buy-sell agreement to buy out a disabled business owner on a reimbursement basis. This helps to maximize the financial return when the business is transferred, while minimizing tax liability.
At Principal Life, we make it easy to implement effective disability protection solutions that work holistically to protect your personal and business needs. Our experienced team of attorneys, Certified Public Accountants and other professionals can assist in the design and implementation of the plan that’s right for you. Talk to your advisor to start the conversation today.
1 DI Retirement Security is issued as a non-cancelable, guaranteed renewable, individual disability income insurance policy. It is not a pension or retirement program or a substitute for such a program. DI Retirement Security is not available for government employees or anyone who is over insured based on Principal Life’s current Issue and Participation guidelines. It may not be available or the benefit amount may be reduced for certain occupations if there is existing DI coverage with lifetime benefits. Additional underwriting guidelines may apply.
2 Additional investment options may be available, including but not limited to annuities and mutual funds. For more information about investment options, go to: www.principal.com/bankerstrust.
3 Key Person Replacement and the Business Loan Protection rider are not approved in all states and are not available in California.