A business owner can choose from a group disability policy, an individual policy, or a combination. The policy should be with a top-rated company, and it should clearly state what disabilities are covered and when the plan applies. A good basic group plan can provide both employer and workers with basic replacement of loss of earned income due to disability. Coverage generally is terminated when an employee leaves the company. An individual disability plan can supplement the group plan.
Most group plans have an upper limit on the benefit amount.
Also, many group plans cover only the base salary and not pension and profit-sharing contributions, deferred compensation, commission income and regular incentive bonuses. An individual disability insurance plan can provide additional income needed to cover financial obligations and living needs. For the business owner, a group or individual disability plan also can serve as a valuable employee recruitment and retention tool in a competitive market. The representative selected must be trustworthy and knowledgeable and represent a company with a broad range of products and a solid reputation for quality. A good insurance representative can help a small-business owner sort through the options and develop a plan based on the company's financial status and the number and types of people it employs.