Self-Employed Disability Insurance

Being self-employed has many benefits to it including a very rewarding income potential, depending on your specific occupation. Along with the benefits of being self-employed however, there are also additional responsibilities. Obtaining individual Disability insurance to protect your income is one of these additional responsibilities. Like all working adults, your ability to earn an income is your greatest financial asset. However, unlike most working adults, individuals who are self-employed cannot rely on an employer to provide them with Disability income insurance.

MR Insurance Consultants can help you by making the process of obtaining Disability insurance as easy and convenient as possible. We provide you with multiple Disability insurance quotes and assist you throughout the process of reviewing and applying for the best option for your situation and occupation. As a self-employed professional, there are certain provisions in a Disability insurance contract that you need and our insurance specialists can help make sure you get them.

If possible, you want to be sure that your Disability insurance policy covers your specific occupation. In other words, you want your Disability insurance to have an Own-Occupation definition of disability. This definition provides occupation-specific protection and as long as you are unable to work in your current occupation, due to an injury or illness, you are eligible for a benefit. There are two specific types of Own-Occupation definitions of disability, which you should discuss with the insurance agent you work with. Whether you work with one of our insurance specialists or someone else, you should ask about and understand the difference between Modified Own-Occupation and True Own-Occupation. If it fits the budget, True Own-Occupation will be your best option.

Policy Riders For The Self-Employed

Additionally, there are two Policy riders that self-employed individuals should have: Future/Guaranteed increase option and Residual disability benefits.

The Future Increase Option Rider provides you the opportunity of increasing your monthly benefit at a future date without having to qualify medically. For a low cost, you are capable of increasing your monthly benefit by simply providing financial documentation (tax returns) that warrants the increase in benefit. Depending on the stage of your career development, this is a means of protecting your future earnings.

The Future Increase Option rider also provides a strategy to increase your Disability benefits over a period of time. Since the amount of Disability insurance a person can purchase is related to their net-of-expense income, you may not qualify for the full benefit your gross income would warrant. For example, if you experience a lot of start up expenses in the first year or two of being self-employed, you may only qualify for a limited benefit. By using the FIO, you can systematically increase your benefit as your expenses go down and net income increases.

The Residual Disability Rider is also a very important rider to have on your Disability insurance. Residual benefits are essentially Partial benefits – meaning that if you incur a partial loss of income due to an injury or illness (15% or greater), you qualify for a partial benefit, which is usually proportionate to the loss of income. Additionally, some contracts will continue to pay residual benefits for as long as you continue to experience a 15% or greater loss of income, even if you are back to working full time. As a self-employed individual, an extended period of time away from work may affect your profitability. Once you are able to return to work full time, what will happen? Will your income just automatically go back to the pre-disability income level? Likely it will not and you will have to build back to where you were prior to becoming disabled. This may take 2 weeks, 2 years or possibly longer. For this reason, your residual disability benefits need to provide a recovery benefit that would pay benefits for the full benefit period.

Being self-employed is a very big responsibility. An untimely injury or illness along with an unprotected income can create an immediate financial disaster. Do not hesitate on purchasing Disability insurance to protect your income, your future and your family’s well being. We encourage you to request a Disability insurance quote or call 1–800–817–4522 to speak with a Disability insurance specialist today.