Fewer than 20% of all working people have a personally owned disability income policiy insuring their incomes against the therat of an unexpected accident or illness. Yet, insurance claims studies indicate that the odds of becoming disabled for 90 days or longer are much greater than dying during one's work years.

1. How is disability defined? Are education, experience and past ernings taken into account in determining what the insured can be reasonably be expected to do?

NOTE:Many contracts today provide an "own occupation" definition providing for the payment of benifits if the insured is unable to work in his or her specialty: e.g., orthopedic surgeon.

2. What about partial or residual disability? Are benefits provided when medical imparement allows the insured to perform only a portion of his or her duties? Is this benefit payable only when preceded by a period of total disability? The wording in the contract is very important.

3. Is a cost of living ajustment available to increase benefit payouts after a disability occurs and protect the insured against inflation?

4. Is the policy both non-cancelable and garanteed renewable by the issuing company?

5. Is the waiting or elimination period proper for the insured's circumstances? Commonly available periods include 30-day, 60-day, 90-day, 6 months and 1year. Naturally, the longer elimination period one selects, the lower his or her premium payments will be. However, a person's nees, cash reserves and income sources should be the deciding factors in selecting a proper elimination/waiting period.

6. What benefit period shoud be selected? A long-term medical disability can be financially devastating. Therefore, one should elect a long-term benefit period where possible. Most companies offer coverage to age 65; some offer lifetime benefit periods.

CAUTION: Highly-compensated employees should be aware of payment "caps" in many Group Long Term Disability policies. while some programs will privide disability income payments at 60% or 66% of salary, many have a relativeley low dollar limitation, such as $3,000 per month.

TYPES OF DISABILITY CONTRACTS

Beyond personal and group term disability policies, several specialized disability contracts are available to the business person:

1. Business Ovehead Expense -Covers expenses such as staff salaries, rent, telephone, utilites, malpractice insurance and other expenses necessary to keep one's office open

2. Key Person Disabiltiy - Reimburses the business for the loss of a key Employee and allows funding of temporary replacement or training of a successor.

3. Disability Buyout - Provides income to fund a Buy-Sell Agreement triggered by the disability of a shareholder executive.