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For Your Health When your body breaks down, your business is likely to follow. Disability insurance protects you from disaster.

When David Burros finally learned about disability insurance, itwas too late to save his family's business. Ten years ago, hismother lost her antiques business after suffering a debilitatingstroke. Burros, now a certified financial planner and CEO of BurrosConsulting & Speaking, a personal and financial planning andconsulting firm in Denver, advises his clients to learn from hisexperience and protect their businesses before it's toolate.

"Your greatest asset isn't your business but ratheryour ability to create wealth," he says. "You can loseeverything else, and you'll get it all back again if you havethe ability to work. That's why disability insurance is thefirst kind of insurance business owners should consider."

Burros recommends purchasing long-term disability insurance toprotect yourself from business loss resulting from a disabilitythat lasts longer than 90 days. The price of your policy depends onthe risks associated with your business, says Burros, but abusiness owner will typically pay approximately 3 percent of his orher after-tax income for a policy that provides coverage until age65. In the event of a long-term disability claim, payments will beroughly equivalent to the after-tax income you achieved before yourdisability and are not subject to being taxed themselves.

To save money on your long-term disability policy, you can playthe odds by purchasing a policy that ends before you reach age 65.Ninety-seven percent of all long-term disabilities last less thanfive years, according to Burros. "If you really need to savemoney, cover yourself for just five years," he says."You're likely to be back to work within thattime."

Playing The Odds

Chances are slim that you or a key employee will die or facepermanent disability while working at your company. That's whypolicies to guard against these conditions are so affordable.Short-term disability--an inability to work for 90 days or less--isfar more common. A nasty flu that develops into a bronchialinfection or an automobile accident that leaves you temporarilydisabled are just a few examples. So a policy that covers businessloss resulting from short-term disability makes sense, right?

Wrong. According to Denver financial planner David Burros,short-term disabilities are so common, and the insurance to coverbusiness loss so expensive, that buying these policies justdoesn't make good financial sense. "I recommendanticipating these occurrences and being able to self-fund theimpact to the business," Burros says. "For mostbusinesses, that will be the most cost-effective use of theirresources."

Contact Sources

Burros Consulting & Speaking, (800) 440-2430,dbcohr@aol.com

Claire Tristram is a business and technology writer in SanJose, California.

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