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Josh Rauschenbach, Advanced Case Design
Group, 1st Global
July 22, 2004 --
Nearly everyone is concerned about building wealth to
meet his or her financial goals. We invest money in order to
build a foundation upon which we can live a secure and
comfortable life. Many
of us purchase life insurance as a tool to protect our
family in case of a tragic event.
But are you providing adequate protection for your
family in the event of a potential loss of income?
Losing even part of your income to disability would
affect your retirement, college plans for your children, and
your family’s overall quality of life, both today and in
the future.
Employer-issued disability insurance
and Social Security are not sufficient. Nearly all
employer-issued disability insurance covers only 60 percent
of your salary, and the benefits you receive from a
corporate disability plan are fully taxable.
In a majority of cases you will receive less than 50
percent of your income.
In order to receive Social Security payments, you
have to be completely disabled for at least one year. When
your Social Security benefits begin, they may be far less
than 50 percent of your current salary.
You may have thought about disability
insurance before but dismissed it because disability is
something that would never happen to you.
Industry studies have shown that workers are three to
five times more likely to become the most overlooked part of
a financial plan. According
to the Social Security Administration, a 20-year-old worker
has a 30-percent chance of becoming disabled before reaching
retirement.
What about business coverage?
Many businesses have no formal plans for transferring
ownership in the event that a business partner becomes
disabled. A
disability buy-out plan is one way to provide for the
unexpected permanent loss of a partner.
Without a buy-out agreement, the disabled business
owner may still be entitled to his or her share of business
profits. The
business may also have to hire a replacement to cover the
duties normally performed by the disabled partner, while
still paying the disabled person’s salary.
A properly drawn up buy-out agreement can provide for
the disabled partner’s business interest to be sold at an
agreed upon price to the other business owners.
One major advantage of a disability buy-out agreement
would be keeping family members of the disabled owner out of
the business, assuring that the future growth and management
of the business will be handled by the active owners.
You can also avoid potential cash flow problems
associated with buying the disabled partner’s business
share by providing funding dollars received from the
underlying insurance.
If you have not already discussed
adding disability insurance to your personal or business
financial plan, talk to your financial advisor.
Without an interrupted and adequate income, your
financial goals may never be realized.
Keeping a consistent income stream is a critical
component in your financial freedom, and disability
insurance is a key component of your wealth care plan.
Call Doug Hall or Vicki Dworski at
215-564-1900
to find out more about income protection.
Securities
offered through 1st Global Capital Corp. Member NASD, SIPC.
Investment Advisory Services offered through 1st Global
Advisors, Inc. 8150 N. Central Expressway, Suite M-1000.
Dallas
,
TX
75206
,
1-800-959-8440
. We
currently have representatives licensed to offer securities
in the states of PA, CA, NJ, NY, TN, DE, FL, OH, CT, and MD,
and licensed to offer investment advisory services in PA.
This is not an offer to sell securities or provide
investment advice in any other state or jurisdiction.
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