California - United States Professional Tennis Association

Teaching Pro Income Replacement for Disabilities
By Dave McKinney, USPTA
When you think of insurance coverage, the two most
common types—home and car insurance—are often
the first that spring to mind. Because the mortgage
company requires the former, and the law requires the
latter, you don’t have much of a choice when it comes
to deciding whether to be insured. However, it’s your
ability to earn an income that allows you to afford
these items. In fact, without earning potential, it would
be difficult for many of us to maintain our homes
and automobiles while still providing for ourselves
as well as the family. The solution for supplementing
this missing income in the event of a permanent or
temporary disability is known as disability insurance.
Disability insurance, along with life insurance, should
be an integral part of your financial plan and what
you’ll need to consider when choosing a policy to
protect your income.
Physical Abilities of Teaching Pros
As tennis teaching professionals, our physical ability
to teach tennis lessons and coach is a large part—if not
all—of our earning potential. What happens if we are
physically unable to teach for a longer period of time,
such as three months or more, due to a major accident
or illness? How will we pay for our mortgages, cars,
utilities and other necessities that we depend on? For
you and your family, it’s very important to have life
insurance in place. When considering the importance
of disability insurance, keep in mind that individuals
are three times more likely to become permanently
disabled than die from a major accident.
Don Gomsi, executive director of the USPTA San
Diego Division, once told me that at a period of time
when USPTA offered optional disability insurance, he
signed up for it. Shortly after that, he was in a major
automobile accident that injured his knee and required
two surgeries. He was off the tennis courts for over
six months. However, his disability insurance kicked
in after one month and covered his loss of income.
Good for Don at that time for signing up for disability
insurance. Unfortunately, USPTA does not offer that
insurance option anymore.
Social Security and Disability
Many U.S. workers take disability risk management
for granted because they assume that Social Security
will take care of everything should they become
disabled. Contrary to popular belief, qualifying
for Social Security disability benefits can be quite
difficult, and it can take a long time for benefits
to start. To qualify, you must prove that you are
incapable of performing any job, not just your
primary occupation. As long as you can be gainfully
employed, even if it’s at minimum wage, you won’t be
able to collect Social Security disability payments.
Protecting Your Income and Your Family
When reviewing your risk management objectives,
take a close look at your emergency reserves
and liquidity capabilities. According to the U.S.
Census Bureau, the average median monthly
household income was $4,200 in 2010. This
data strongly suggests that a supplemental income
source would be a necessity for many Americans if
they were to become disabled. It’s important that you
understand the benefits provided, if any at all, by your
company, as you may be covered under a short-term
or long-term disability policy through your employer
benefits plan. When it comes to disability insurance,
“short-term” refers to periods of 90 days or less, while
“long-term” refers to periods of more than 90 days.
The Bottom Line
What would happen to your household income if you
became disabled for a long time? Hopefully, you and
your family would be taken care of, but if you’re not
sure that’s the case, now might be the time to cover
that risk. Once you’ve determined what disability risk
management you have in place, you can then make an
educated decision as to whether you are fully insured
or underinsured. If you lack the appropriate income
replacement, you may want to consider buying a
personal disability policy.
Dave McKinney is the tennis director at
Spanish Hills Country Club in Camarillo,
Calif. He is an also an advisor with Heritage
Capital Strategies, a consulting firm
specializing in planning strategies to help
clients create and preserve wealth. Dave can
be reached at dmckinney@nfpsi.com.
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