If the disability is not temporary or will last for

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If the disability is not temporary (or will last for more than a relatively short period of time), then participants will need a long-term disability policy for extended coverage. Long-term disability policies typically have an elimination period, which is a length of time when no benefits will be paid. The elimination period might be anywhere from 30-365 days. This is the gap where the short-term disability policy is needed. Every worker should strive to add certain employer-sponsored benefits. The ranking below is one idea for prioritization, but the specific ranking for a given participant is subject to personal needs analysis. 1. Employer-sponsored health insurance coverage 2. Employer-sponsored retirement plan 3. Purchase a short-term disability policy 4. Purchase a long-term disability policy 5. Purchase life insurance (if needed due to spouse or kids or just a desire to create a larger estate) Short-term and long-term disability policies will replace lost wages due to disability. This is a vital step for everyone unless you are so wealthy that bills are not an issue. Building an emergency fund is also a vital step to protect financial health. Q: What should be chosen for the firm's definition of disability? A: Use the definition as applied by the Social Security Administration. Q: What is an elimination period? A: An elimination period is a waiting period where no benefits are paid. Recommended Legal Documents As someone acquires financial assets, they need to have in place a series of legal documents to protect themselves. Some of these documents are sourced for health care planning needs and some are strictly for financial reasons. The "need" barometer goes up as a spouse and especially as kids enter the picture. Only a competent lawyer can help someone with these documents, but a financial planner can do their clients a service by discussing the need and referring them to a legal professional. This can be a great relationship building tool! The first legal document that needs to be considered is a Last Will and Testament . This document will name an Executor (male) or Executrix (female) who will have the legal authority to take charge of and distribute all assets of an individual upon their passing. Each state will have its own rules (hence the need for a competent lawyer), but it is always a good idea to have witnesses present when a will is signed to avoid disputes within the family down the road. The Executor/Executrix should have a copy of the will (or at least know where they a kept) and all potential heirs should know who this person is. Sometimes clients will want to name more than one child in this role so that everyone feels included. This can be a recipe for disaster. What if one child wants to dispose of an asset one way and the other wants to dispose of an asset another way. They both have legal authority. Who wins? Stalemate and
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argument. Pick one person to run the show and hopefully it can be a democratic process. It is also wise
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  • Spring '14
  • VOSS,JAMESA
  • Cash balance plan, HCES

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