General Practice, Solo, and Small Firm Division
Insuring Your Future
By Renee Leskiw
Good health is a given-until it's taken away. Disability, no matter the duration, is a threat no lawyer, especially the solo practitioner, can ignore. For that purpose, there are several insurance plans, including, mid- and long-term disability, and office overhead.
Membership in the ABA includes membership in the American Bar Endowment, a charitable arm of the association that offers specialized insurance plans for lawyers and judges. Participants are asked to donate the dividends for legal research, education, and public service projects. Those donations are eligible for a charitable tax deduction. Following are highlights of the ABE plans.
First, what is a disability? It's an accident, injury, or illness that completely prevents you from performing the material duties of your job. Through ABE's mid- and long-term disability plans, an attorney who is under age 65 and works full-time can be insured for $100 to $9,500 per month. You can choose the amount based, in part, on your income for the 12 months preceding the date of application. Spouses may also apply. You pick the waiting period-60, 90, 180, 360 days-based on your need and the premiums. The plans also allow for limited partial disability benefits if you are able to return to work on a part-time basis. There's even a cost of living adjustment option.
Mid-term benefits are payable for up to two years for disabilities due to illness; five years for disabilities due to accident. Long-term benefits are payable up to age 65 (disabilities beyond 60 months are defined as the complete inability of the insured to perform the material duties of any gainful job for which the insured is reasonably fit by training, education, or experience).
But while you're tending to the body, who's minding the store? Office overhead insurance will cover rent; interest payments on outstanding business debts; utilities; non-lawyer salaries and payroll taxes; postage and stationery; equipment maintenance; rental, lease, or depreciation of office equipment; monthly average of taxes on premises; insurance premiums for Workers' Compensation, employee medical plans, general liabilities, professional liability/malpractice; accounting fees; and professional memberships and/or subscription fees. It doesn't cover salaries for a partner or another lawyer hired to fill in; purchases of equipment and goods; income taxes; principal on any indebtedness; or charitable contributions.
Depending on your regular office expenses, participants can choose coverage from $500 to $10,000 per month, payable up to 12 months. Coverage kicks in on the 31st day of a total disability.
For all of these programs, premiums are waived during the term of the disability, you cannot be singled out for an increase in premiums or cancellation, and your benefits are usually (though not always) tax-free. While it is always advisable to double-check with your tax advisor on deductibility of certain insurance premiums as business expenses, in general premiums for office overhead insurance are deductible, but premiums for disability insurance are not.
For complete details on eligibility, availability, costs, and more visit the ABE website at www.abendowment.org and click on "insurance" or call (800) 621-8981.
Renee Leskiw is executive director of the American Bar Endowment.
What Is the ABE?
The ABE is a fundraising organization that contributes funding for education, research, and public service activities within the field of law.