Decreasing Term Disability

Whether you are a dentist just starting a practice, buying an existing practice, or buying into a partnership, you will have one thing in common. The need for money.  The next step generally is to find a bank that will lend you this money.

Bank	Loan	Your Practice

The Problem: It is not unusual for the bank or the loan officer to request that you

guarantee the loan with life insurance in the event of your premature death and even disability insurance in case you become disabled.  The banks do not care what

hardships may befall you.  They want their loan repayment guaranteed.  Most dentists find themselves purchasing a term life insurance policy to cover the loan in the event of death.  Typically, this can done rather easily and at a reasonable price in today’s term life insurance market. The policy is then assigned to the bank.

The next request from the bank may be a bit more difficult for you to swallow.  It is not at all unusual for the banker to request that you “assign your current personal disability policy over to the bank in case you become disabled”, and are unable to pay the monthly note.  It is also not unusual for them to request the assignment of your disability business overhead policy over to the bank.

Now, for the first time, you realize this could definitely become a problem if you actually were to become disabled.  The bank owns your building all your disability policies and benefits are assigned to them as well. If disabled, you get nothing.

What happened to that nice banker?

You’re Disabled	The Bank	Wants Their Money

Solution: Decreasing Term Disability was designed to solve this very problem.  The policy provides monthly benefits for the chosen benefit period, which is usually the same period as the term of the bank loan.  The options available are any number of years from 5 to 30, but, coverage may not extend beyond age 60.  The policy will insure up to 80% of the monthly loan payments (principal and interest) where the obligation rests with a single principal. The maximum monthly benefit is usually $10,000 per month.  The elimination periods can either be 30, 60, 90 or 180 days.

Reducing Term Disability is a separate policy and is paid in addition to your personal disability and business overhead policies.  It is issued over and above your in force coverage. This eliminates the need to assign your personal coverage over to the bank.  It solves the problem rather easily and the cost is extremely reasonable.

Happy Banker	Your Loan	Happy You

When to use Decreasing Term Disability?

 Business Expansion

Employee Contract Guarantee

Contract Performance Guarantees

Medium Term Loans

Purchase Agreements

Buying a Practice

 And remember the best part of all…..Decreasing Term Disability is in addition to any personal disability insurance you may already have OR may choose to purchase in the future.