Category Archives: Entrepreneur

Overlooking disability insurance can be costly

AP News

By Dave Carpenter on July 25, 2012

CHICAGO (AP) — Long-term disability insurance is the forgotten insurance.

The importance of auto, health, homeowners and life insurance is well known. But disability coverage, which replaces lost earnings if you can’t work, tends to be ignored — until you need it.

Government studies show that a 20-year-old worker has a 30 percent chance of becoming disabled before reaching full retirement age. Yet only about a third of employees in private industry have long-term disability insurance, according to the Bureau of Labor Statistics.

“It could be argued that the disability of a breadwinner is worse than the death of a breadwinner,” says James Hunt, insurance actuary for the Consumer Federation of America, “because the disabled person is still soaking up money.”

That’s why it makes sense to purchase individual coverage if you’re self-employed — or not covered sufficiently or at all by your employer.

A look at what you need to know about disability insurance:

Q: How does disability insurance work?

A: Disability insurance protects from a loss of income resulting from an inability to work due to an accident or illness. You typically receive disability checks starting three to six months after you become unable to work.

There are three sources of this coverage: The Social Security Administration, employers and private insurers.

— Social Security Disability Insurance is the bedrock protection against disability. About 153 million workers are insured by the program through FICA taxes. But it has a very strict definition of disability and it can take two years or more to be approved for benefits.

— Many employers offer disability coverage through a group plan, which pays a specified portion of your salary.

— Private insurance coverage is most often sought out by high-income professionals such as doctors and lawyers who have made a huge investment in their earnings potential; self-employed workers, and executives looking for supplemental coverage.

Q: Do you need to buy coverage if you receive disability insurance through your employer?

A: It depends whether you could get by on the benefit checks. A typical group plan replaces just 40 percent to 60 percent of your salary, up to a maximum $5,000 a month or $60,000 a year. And if the employer pays your premiums, the checks will be taxable.

Benefits can last for either a set number of years or until retirement age. Check your plan’s details closely. Company benefits have been steadily shrinking in recent years. Group policies often limit the duration of benefits to only two years if you can’t perform your job duties.

If your policy looks insufficient, ask your employer whether you can pay for additional coverage. Otherwise, consider getting extra insurance from a private insurer to extend the duration or bring the coverage up to 70 percent or 80 percent of income.

Q: Why can’t you count on Social Security Disability Insurance to cover your needs if you are disabled?

A: The average disability benefit is just $1,111 a month, based on payments by the Social Security Administration this month to 8.8 million beneficiaries. And you only qualify for it if you are unable to work in any capacity, not just at your chosen occupation. A list of conditions that are considered disabling is available by doing a search for “disability evaluation” at the agency’s website, www.ssa.gov .

Q: What should you look for in a policy?

A: If you have a highly specialized job or can simply afford to pay the premiums, it’s worth paying extra to have an “own occupation” policy. This coverage pays benefits if you are unable to perform the major duties of your own occupation. To trim some of the costs, it may be advisable to obtain “own occupation” coverage for one or two years and “any occupation” coverage after that.

The length of benefits is key, and will affect the cost of premiums significantly. Some policies pay benefits until age 65 or until your full retirement age for Social Security benefits, others for two or five years. Seek out a non-cancellable policy.

You probably also want a policy that will pay “residual” benefits, which will compensate for a decline in income if you are able to work at a new job that pays less.

Q: How much does disability insurance cost?

A: Prices vary based on age, gender, occupation, amount of coverage and health status. Check with a broker to get quotes from at least three different insurers.

For someone who does not have coverage at work, a plan with all the extras including inflation protection costs roughly 2 percent to 2.5 percent of annual salary for a man, and 3 percent to 4 percent for a woman. Women pay more because they file claims more frequently and for a longer duration than men.

If someone has coverage at work but wants earnings to boost benefits to 80 percent salary replacement, the annual cost is typically about 1 percent of the worker’s salary.

3 Interview Questions That Reveal Everything

Employee fit is crucial. Here’s a simple way to know if a job candidate is right for your business.

Interviewing job candidates is tough, especially because some candidates are a lot better at interviewing than they are at working.

To get the core info you need about the candidates you interview, here’s a simple but incredibly effective interview technique I learned from John Younger, the CEO of Accolo, a cloud recruiting solutions provider. (If you think you’ve conducted a lot of interviews, think again: Younger has interviewed thousands of people.)

Here’s how it works. Just start from the beginning of the candidate’s work history and work your way through each subsequent job. Move quickly, and don’t ask for detail. And don’t ask follow-up questions, at least not yet.

Go through each job and ask the same three questions:

1. How did you find out about the job?

 2. What did you like about the job before you started?

 3. Why did you leave?

“What’s amazing,” Younger says, “is that after a few minutes, you will always have learned something about the candidate–whether positive or negative–that you would never have learned otherwise.”

Here’s why:

How did you find out about the job?

Job boards, general postings, online listings, job fairs–most people find their first few jobs that way, so that’s certainly not a red flag.

But a candidate who continues to find each successive job from general postings probably hasn’t figured out what he or she wants to do–and where he or she would like to do it.

He or she is just looking for a job; often, any job.

And that probably means he or she isn’t particularly eager to work for you. He or she just wants a job. Yours will do–until something else comes along.

“Plus, by the time you get to Job Three, Four, or Five in your career, and you haven’t been pulled into a job by someone you previously worked for, that’s a red flag,” Younger says. “That shows you didn’t build relationships, develop trust, and show a level of competence that made someone go out of their way to bring you into their organization.”

On the flip side, being pulled in is like a great reference–without the letter.

What did you like about the job before you started?

In time, interviewees should describe the reason they took a particular job for more specific reasons than “great opportunity,” “chance to learn about the industry,” or “next step in my career.”

Great employees don’t work hard because of lofty titles or huge salaries. They work hard because they appreciate their work environment and enjoy what they do. (Titles and salary are just icing on the fulfillment cake.)

That means they know the kind of environment they will thrive in, and they know the type of work that motivates and challenges them–and not only can they describe it, they actively seek it.

Why did you leave?

Sometimes people leave for a better opportunity. Sometimes they leave for more money.

Often, though, they leave because an employer is too demanding. Or the employee doesn’t get along with his or her boss. Or the employee doesn’t get along with co-workers.

When that is the case, don’t be judgmental. Resist the temptation to ask for detail. Hang on to follow-ups. Stick to the rhythm of the three questions. That makes it natural for candidates to be more open and candid.

In the process, many candidates will describe issues with management or disagreements with other employees or with taking responsibility–issues they otherwise would not have shared.

Then follow up on patterns that concern you.

“It’s a quick way to get to get to the heart of a candidate’s sense of teamwork and responsibility,” Younger says. “Some people never take ownership and always see problems as someone else’s problem. And some candidates have consistently had problems with their bosses–which means they’ll also have issues with you.”

And a bonus question:

How many people have you hired, and where did you find them?

Say you’re interviewing candidates for a leadership position. Want to know how their direct reports feel about them?

Don’t look only for candidates who were brought into an organization by someone else; look for candidates who brought employees into their organization.

“Great employees go out of their way to work with great leaders,” Younger says. “If you’re tough but fair, and you treat people well, they will go out of their way to work with you. The fact that employees changed jobs just so they could work for you speaks volumes to your leadership and people skills.”

True Secret to Success (It’s Not What You Think)

 | 

  Inc.com  Jul 18, 2012

If you’re not exercising this emotional muscle, you’re probably setting yourself up for failure.

Box Car Racing

Getty

 
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I’m utterly convinced that the key to lifelong success is the regular exercise of a single emotional muscle: gratitude.

People who approach life with a sense of gratitude are constantly aware of what’s wonderful in their life. Because they enjoy the fruits of their successes, they seek out more success. And when things don’t go as planned, people who are grateful can put failure into perspective.

By contrast, people who lack gratitude are never truly happy. If they succeed at a task, they don’t enjoy it. For them, a string of successes is like trying to fill a bucket with a huge leak in the bottom. And failure invariably makes them bitter, angry, and discouraged.

Therefore, if you want to be successful, you need to feel more gratitude. Fortunately, gratitude, like most emotions, is like a muscle: The more you use it, the stronger and more resilient it becomes.

Practice Nightly

The best time to exercise gratitude is just before bed. Take out your tablet (electronic or otherwise) and record the events of the day that created positive emotions, either in you or in those around you.

Did you help somebody solve a problem? Write it down. Did you connect with a colleague or friend? Write it down. Did you make somebody smile? Write it down.

What you’re doing is “programming your brain” to view your day more positively. You’re throwing mental focus on what worked well, and shrugging off what didn’t. As a result, you’ll sleep better, and you’ll wake up more refreshed.

Reprogramming Your Brain

More important, you’re also programming your brain to notice even more reasons to feel gratitude. You’ll quickly discover that even a “bad day” is full of moments that are worthy of gratitude. Success becomes sweeter; failure, less sour.

The more regularly you practice this exercise, the stronger its effects.

Over time, your “gratitude muscle” will become so strong that you’ll attract more success into your life, not to mention greater numbers of successful (i.e., grateful) people. You’ll also find yourself thanking people more often. That’s good for you and for them, too.

This method works. If you don’t believe me, try it for at least a week. You’ll be amazed at what a huge difference it makes.

If you like this post, sign up for the free Sales Source newsletter.

Geoffrey James writes the “Sales Source” column on Inc.com, the world’s most-visited sales-oriented blog. His newly published book is Business to Business Selling: Power Words and Strategies From the World’s Top Sales Experts@Sales_Source

A Submarine Captain On The Power Of Leadership Language

This article is written by a member of the FastCompany contributor community.
You think your office is a pressure cooker? Try commanding a nuclear-powered warship.

Captain David Marquet was supposed to command another submarine but was vectored to the USS Santa Fe at the last minute. The Santa Fe was in the hurt locker: morale was low, performance was low, retention was at the bottom of the fleet. The subsequent journey caused him to rethink everything about leadership he’d been taught. This excerpt is part of that story.

“Conn, maneuvering, reactor scram!” The reactor had just shut down. The engineer inserted the shutdown deliberately, testing his department’s ability to find and repair a simulated fault.

The Officer of the Deck was my senior department head, Lieutenant Commander Bill Greene, and he was doing all the right things. We had shifted propulsion from the main engines to an auxiliary electric motor, the EPM, to turn the propeller. The EPM can only power the ship at low speed and draws down the battery.

The ship was coming shallow in order to use its diesel engine to provide electrical power and keep the battery charged until the reactor was restarted. During the long troubleshooting period while the nuclear electronics technicians were isolating the fault, I started to get bored. I fiddled with my flashlight, turning it on and off. Things were going too smoothly. I couldn’t let the crew think their new captain was easy!

I nudged Bill and suggested we increase speed from “ahead 1/3” to “ahead 2/3” on the EPM to give the nuclear-trained enlisted men a sense of urgency. This would significantly increase the rate of battery discharge and put pressure on the troubleshooters to find and correct the fault quickly. At “ahead 2/3,” there is a near continuous click-click-click on the battery amp-hour meter. An audible reminder that time is running out.

“Ahead 2/3,” he ordered.

Nothing happened.

The helmsman should have reached over and rung up ahead 2/3. Instead, I could see him squirming in his chair. No one said anything and several awkward seconds passed. Noting that the order hadn’t been carried out, I asked the helmsman what was going on. He was facing his panel but reported over his shoulder, “Captain, there is no ahead 2/3 on the EPM!”

I had made a mistake. I’d been shifted to command Santa Fe at the last minute and unlike every other submarine I’d been on, there was only a 1/3 on the EPM.

I applauded the helmsman and grabbed Bill, the officer on deck–the OOD. In the corner of the control room, I asked him if he knew there was no ahead 2/3 on the EPM.

“Yes, Captain, I did.”

“Well, why did you order it?” I asked, astounded.

“Because you told me to.”

He was being perfectly honest. By giving that order, I took the crew right back to the top-down command and control leadership model. That my most senior, experienced OOD would repeat it was a giant wake-up call about the perils of that model for something as complicated as a submarine. What happens when the leader is wrong in a top-down culture? Everyone goes over the cliff. I vowed henceforth never to give an order, any order. Instead, subordinates would say “I intend to….”

Mechanism: Use “I intend to . . .” to turn passive followers into active leaders

Although it may seem like a minor trick of language, we found “I intend to…” profoundly shifted ownership of the plan to the officers.

“I intend to . . .” didn’t take long to catch on. The officers and crew loved it.

A year later, I was standing on the bridge of the Santa Fe with Dr. Stephen Covey. He’d heard what we were doing and was interested in riding a submarine. By this point, the crew had fully embraced our initiatives for control, and “I intend to . . .” was prominently visible. Throughout the day the officers approached me with “I intend to.”

“Captain, I intend to submerge the ship. We are in water we own, water depth has been checked and is 400 feet, all men are below, the ship is rigged for dive, and I’ve certified my watch team.”

I’d reply “Very well” and off we’d go.

The Power of Words

The key to your team becoming more proactive rests in the language subordinates and superiors use.

Here is a short list of “disempowered phrases” that passive followers use:

  • Request permission to . . .
  • I would like to . . .
  • What should I do about . . .
  • Do you think we should . . .
  • Could we . . .

Here is a short list of “empowered phrases” that active doers use:

  • I intend to . . .
  • I plan on . . .
  • I will . . .
  • We will . . .

Later, I heard from a friend of mine who had taught future submarine commanders how frustrated he was by the inability of too many officers to make decisions at the command level. He said that these officers “came from good ships” but would become paralyzed when it came to tough decision making. I took issue with his categorizing them as “good ships.” By using that term, he meant ships that didn’t have problems—at least that we knew about. But this had obviously been accomplished using a top-down, leader-follower structure where the captain made the decisions. Had those officers practiced “I intend to…” when they were second-in-command, they would have been practiced in decision making.

This shows the degree to which we reward personality-centered leadership structures and accept the limitations. These may have been good ships, in that they avoided problems, but it certainly was not good leadership.

Questions to Consider

  • What causes us to take control when we should be giving control?
  • Can you recall a recent incident where your subordinate followed your order because he or she thought you had learned secret information “for executives only”?
  • What would be the most challenging obstacle to implementing “I intend to . . .” in your place of business? 

From Turn the Ship Around!: How to Create Leadership at Every Level (Greenleaf 2012) by L. David Marquet, Captain, U.S. Navy (Retired).

[Image: Flickr user UKMOD]

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Reeve Conover is a Registered Representative. Securities offered through Cambridge Investment Research, Inc., a Broker/dealer member FINRA/SPIC. Cambridge and Conover Consulting are not affiliated. Licensed in SC, NC, NY, CT, NJ, and CA.
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