Being your own boss can be a great feeling but it also means you are exclusively responsible for your income. If something were to happen to you as a result of which you are forced to discontinue your work, your income will be affected. This is why disability insurance coverage is equally important for self-employed individuals.
Self-employed people can be freelancers, business owners, or those with professional practice. They find it rather difficult to take breaks from work because the entire business rests on their shoulders. For them any kind of disability can be a huge setback. If they cannot work because of some serious injury or illness, keeping the business running may become a challenge.
Things to know about disability insurance when you are self-employed:
- Disability companies provide disability income insurance policies that are designed to help self-employed people protect their income. When you are the sole owner of any business, this coverage is all the more important. Without a regular income during the period of disability, you cannot hope to meet your expenses. Bills will start to pile up and you will find yourself in deep financial trouble.
- Disability insurance can offer two kinds of coverage: Short-term disability insurance that will cover expenses for a shorter duration with policies ranging between 2-5 years. When you meet with an accident or illness it can take care of you for a few weeks or months. This could be useful for events like childbirth or a scheduled surgery. Long-term disability insurance is for a prolonged duration or even permanently. This gives you peace of mind since you do not have to worry about bills and can focus on getting better. But this policy will become active only after 90 days have passed.
- When choosing coverage from disability insurance services, you must not make a decision hurriedly. You should shop around first and find out what kind of coverage you need. This means identifying the coverage amount. To do this, you must consider the budget and understand what is necessary to survive comfortably. This is what you must convey to your disability insurance broker.
- You need to know the waiting period before the coverage kicks in. When the waiting period is less, premiums are high. There are situations when because of an injury you cannot pursue your profession or current job, but you can still do some other work. In such a situation, the coverage can protect you for the first 2 years if you cannot do your original job.
- It is better to choose guaranteed policies or those that will be renewed automatically provided you pay premiums on time.
- You can consider getting partial benefit or residual benefit riders where you can receive part of your monthly benefits if you can work a bit. As you recover, you start rebuilding your business.
- Big insurers can offer overhead expenses coverage that will provide reimbursement for almost 100% overhead costs so that you have fewer burdens.
- You must understand that your career will have an effect on premium rates. Insurers categorize jobs based on work hazards since some jobs are prone to injuries. The lower your risks, the lower will be the premium.
Knowing these facts can help you get the right disability insurance coverage from a company like MGIS. MGIS works with the top brokers nationwide to offer disability insurance for the self-employed. They can help you choose the right type of coverage and the right amount.