Disability Insurance

by **Peterb6086** » Tue Apr 17, 2012 1:23 pm

I have a 61 year old client who is a college professor, earns over $240k per year, has two houses worth $2mil, and 401k assets of 500k. He has mortgaged himself to over 1.3 mil spending the money on frivalous items. He plans to work for the rest of his life ie 80 - 85 to support his spending lifestyle. Essentially, his net worth is 1/2 mil, and no plans to cut down on his spending habits.
He has enough life insurance to cover his wife's needs in case he dies - all term insurance.

Main issue I see is if he becomes disabled. He has almost no Disability ins thru work.

If he becomes disabled and cannot teach, his life and that of his wife will fall apart. They will lose both houses and still not have enough left over to support the wife for too many years.

I have been trying in vain to find disability coverage for him that would go out to age 75 or 80. Long Term Care insurance is an option since there are policies that will allow large contributions and payouts, but these only appear to go out a maximum of 6 years. Also he risks being disabled but still not eligible for LTC.

Does anyone know if any company will issue LTD at age 61 out to age 75 or 80? Cost would be high, but he would be willing to pay for the coverage. I even tried Lloyds of London and it was a no go.

Client lives in New York

I'm also asking for suggestions.

by **The Wedge** » Tue May 08, 2012 7:36 pm

I would consider a critical illness policy. Limits are up to $500k from some companies and no coordination with social programs (workman's comp, state DI or social security).

Just verify the guaranteed renewability on such a policy.

Also, term insurance on him is probably not enough - given his age. I'd look into verifying the ownership of the policy so creditors cannot claim it against the estate and a more permanent form of insurance. Perhaps a non-lapse guaranteed UL policy.