Guest Blog by Mark A. Kinback, AVP Underwriting & Multi-life Sales at Principal Financial Group, Mark has over 35 years of experience in both underwriting and individual disability income marketing.
As the parent of four children, I felt pretty good two years ago when my youngest graduated from college and got a job. On the day she moved out of the house, all four children were working, living away from home, and supporting themselves (except for the occasional money my wife gives them without telling me). I thought I had crossed the finish line of worrying about their money issues and could sit back and relax while they plotted their own financial futures.
Three of the children ended up working for companies with very good group long-term disability insurance programs. Their benefits are tax-free with high caps and high replacement amounts.
For my oldest son, however, it’s a slightly different story. He got a job with a company started by a venture capital firm. It pays well, but does very little for benefits. Like many young professionals with condo payments, car payments, IRA contributions, etc., my son was slow to embrace other benefit commitments. One weekend, I talked to him about protecting his income. I asked him what would happen if he became too sick or hurt to work. He didn’t answer right away but in the background my wife casually said, “We’ll help him.”
As soon as I heard that, I knew what she’d like us to do — help pay his monthly bills for as long as necessary. We would essentially become a non-profit insurance company with the unique feature of charging no premiums! This would be in addition to our current non-profit loan company that doesn’t collect the money lent to the kids.
Recognizing the potential liability of my wife’s plan, I proposed an idea that I felt would work for all parties – a “starter” income protection – insurance program. I agreed to pay the premiums for an individual disability income insurance policy for my son for one year if he would apply for coverage within 30 days. Then he would be responsible for payments after a year. I’m happy to say he accepted the offer. That means two things: I sleep better at night and my wife is out of the insurance business (at least for now!)