Milo Minutes: Multi Life Disability Insurance Guaranteed Issue

We have an attorney firm. The firm has changed its operational structure, with each partner opening their own LLC to protect against creditors and liability. They are paid a base salary, and all extra earnings are distributed as a K1. The question is, can we help them with supplemental Disability Insurance, as their group insurance covers only 60% of their salary and is capped at $10k/month, and they are not set up as a traditional business?

Before I continue, let's break down why they are interested in more Disability Insurance:

If your group Long Term Disability covers 60% of your income and is capped at $10k/month, the maximum you can receive is $10k/month or $120k/year. While this is standard, it falls short for high earners. For example, if you earn a $120k base salary plus a $1.5 million K1 distribution, your group benefits only cover your base salary, and you will end up paying taxes on that benefits amount. Group benefits don't cover bonuses and K1s, leaving only a small percentage of your income protected.

However, there is a solution that provides Individual Disability coverage for key employees.

When you own individual Disability Insurance:

• - You can include your bonus as earned income or K1 contributions.
• - It is portable; if you leave that workplace, the policy goes with you.
• - The definition of disability is significantly better than in group LTD.
• - Benefits are income tax-free, providing more financial security if you can't work.
• - A Guardian/Berkshire policy can pay until you're financially recovered, not just physically recovered, helping maintain your lifestyle even if you can't work long hours like before.

Based on this information, I told the producer this is a great case for Multi Life Disability Insurance (MLDI) that is offered on a Guaranteed Issue basis without medical underwriting. For attorneys in their mid-50s, traditional underwriting could result in declines or ratings due to medical exams and financial documentation. With MLDI, there's a discount, and the same policy can be approved in a week, helping the firm retain and attract employees and enrich core benefits. This helped the producer to place DI policies without any exclusions, ratings, or declines. If you want to make selling Disability Insurance easy and fun, read about the Multi Life Disability Program from Guardian or ask me.

For more insightful reads, stay tuned to Milo Minutes! A one-minute read for Financial Advisors and Insurance Agents where I guide you through the insurance landscape and share stories about the common challenges my brokers face and the problem-solving services I provide to give the appropriate solutions for their clients. Guardian, its subsidiaries, agents and employees do not provide tax, legal, or accounting advice.

Individual disability income products underwritten and issued by Berkshire Life Insurance Company of America (BLICOA) Pittsfield, MA. BLICOA is a wholly owned stock subsidiary of The Guardian Life Insurance Company of America (Guardian) New York, NY. Product provisions and availability may vary by state. 2024-177117 Exp 6/2026.

#DisabilityInsurance #MultiLifeDisability #IncomeProtection #AttorneyFirm #SupplementalInsurance #GuaranteedIssue