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Steve Marr Blog

Steve Marr's contributions

Sep 09

Disability insurance

Posted by: Steve Marr

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“Tom” owned a business that employed two sons and a son-in-law. He asked me whether disability insurance was worth the cost. Under these circumstances I believe a disability insurance policy is a good idea. Here’s why.


First, if either family member were disabled through an accident or illness; he would be hard pressed to fire them. To stop income to a relative in crisis is a hard choice.

Second, if the business continued to pay a salary when the injured person couldn’t work; the long term cost to the business could be crippling. Remember, a disability could last 20 to 40 years. That’s a long time to carry someone who is unable to work.

Resentments can surface within the family because if you cut back the wages of an injured relative, they feel intense financial pressure. If you keep carrying them, you or others feel resentment build.

Another reason in favor of disability insurance is that you don’t have to decide whether a family member is able to work. The insurance company makes that call.

Finally, when a disability policy covers all employees; you have the peace of mind to release the situation. The family won’t starve, although they may need to make some adjustments. Disability insurance will give them long-term income to see them through.

Understand that many policies have a six month waiting period. In most instances, you can carry an employee for the six months so these short term policies are likely not as necessary as long term coverage.

King Solomon wrote, “A prudent person foresees danger and takes precautions. The simpleton goes blindly on and suffers the consequences.” (Proverbs 27:12, NLT) Be a prudent employer, especially if you employ relatives. A disability policy can provide a safety net and protect the family bond in the event of tragic circumstances.

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