Accountants pore a lot of money into their careers, which is why financial protection is important.
Accountants and certified public accountants (CPAs) are used to helping people get their financial lives in order. But what about their own finances? Long-term disability insurance is a crucial part of any financial safety net. It can be even more important for accountants who have put a lot of money into their chosen career paths. Accountants and CPAs need to make sure they look at their financial needs, their policy options and long-term disability insurance prices to find the best disability insurance company to protect themselves and their careers.
Becoming an accountant isn’t cheap. There’s the cost of an undergraduate degree, and we all know how expensive college can be. Then, prospective accountants may decide to get their master’s. Accounting Degree Review lists the most affordable online courses for a master's degree in accounting — starting at more than $12,000. The cost only goes up from there, especially for in-person courses (NYU’s Stern School of Business totals their Master of Science degree in Accounting at more than $90,000).
And that’s not including becoming a CPA. According to the Minnesota Society of Certified Public Accountants, the cost of getting a CPA certification can range from nearly $3,200 to more than $6,000, depending on how much of it is self-directed.
In short, any accountant worth their salt is going to be aware of how much their career cost them. But they also know how much they’ll potentially earn. Payscale notes that the average CPA earns around $65,000, with the ability to get into six figures. (The average salary for a standard accountant is around $50,000, meaning it’s probably worth the investment to get certified.)
A disability can also set you back in your finances. If you become disabled and return to work after three years, your earnings take a hit without disability insurance. You’ll also miss out on the ability to contribute to a 401(k) (and, potentially, other retirement accounts) meaning you’d have more ground to make up.
|Company||30 years old||40 years old||50 years old|
|Ameritas||$105.42/mo | $1,219.34/yr||$168.13/mo | $1,948.37/yr||$258.27/mo | $2,996.60/yr|
|Assurity*||$125.90/mo | $1,447.20/yr||$211.45/mo | $2,430.35/yr||$281.55/mo | $3,236.39/yr|
|Guardian-Berkshire||$104.56/mo | $1,254.75/yr||$159.50/mo | $1,914.00/yr||$241.22/mo | $2,894.63/yr|
|Principal||$123.09/mo | $1,405.80/yr||$185.53/mo | $2,119.05/yr||$274.26/mo | $3,132.45/yr|
|The Standard||$127.51/mo | $1,457.30/yr||$184.84/mo | $2,112.47/yr||$276.88/mo | $3,164.31/yr|
|MassMutual**||$105.19/mo | $1,237.20/yr||$162.26/mo | $1,896.88/yr||$260.81/mo | $3,036.20/yr|
|Mutual of Omaha||$126.80/mo | $1,449.00/yr||$190.48/mo | $2,176.77/yr||$291.59/mo | $3,332.41/yr|
*Non-cancelable policies not available
**To age 67; non-cancelable policies not available
These sample rates are based on $5,000 monthly benefits for non-smoker males in New York. The maximum benefit amount would be determined by your gross income and any other group or individual plans you have in place. They are own occupation with 90-day elimination periods, age 65 benefit periods and partial residual benefit, future purchase, non-cancelable and automatic increase benefit features (unless otherwise noted).
As you may have noticed, we’re really been talking about two groups here: accountants in general, and CPAs in particular. While there’s a lot of crossover, your final rates depend on your specific degree and whether or not you’re a CPA. Disability insurance companies give preferable rates based on your level of education, so CPAs can get more favorable rates than other accountants.
What if you want to buy disability insurance before you’re a CPA? Maybe you want to lock in your rates while you’re younger, but also want to get beneficial CPA rates. You can do that. Apply now, and you can apply for reconsideration at a later date to get a better price on your policy.
If you work for an accounting firm, your employer may offer group disability plans. If that’s the case, be sure to know the policy details. There will be specific language about what counts as a disability, and how partial disabilities (and benefits) are handled. Also, maximum monthly benefits typically cap out between $5,000 and $10,000, which may not be enough to cover your need. Plus, any benefits from policies for which your employer pays the premiums will be taxed.
That’s why a supplemental private disability insurance policy is important even if your employer provides disability insurance. Not only can it help protect you if you earn a higher income, it can also help pay any taxes incurred by an employer policy.
A residual, or partial, disability insurance policy is especially important for accountants who run their own firm. Even if you’re able to work after a disability, you may not be able to work as often as you did before. For those who are sole proprietors or have a small firm that works on referrals, that has a direct impact on your earnings. A residual disability policy lets you earn partial benefits if you only earn a portion of what you did before your disability.
Finally, look for a true own-occupation disability policy. This means the policy pays out if you’re unable to do your actual job — in this case, be an accountant — even if you can perform other work.
Accountants and CPAs have a lot of options for long-term disability insurance. It’s important to consult an independent broker or agent to know what those options are and be sure you’re getting the policy that’s best for you.
Not a CPA? Find the best disability insurance companies for your career.
Colin Lalley is the Associate Director of SEO Content at Policygenius in New York City. His writing on insurance and personal finance has appeared on Betterment, Inc, Credit Sesame, and the Council for Disability Awareness.