Disability insurance for the self-employed is often put to the wayside because people do not understand how it can benefit them. In this article, we will go over the benefits of disability insurance for the self-employed and what to look for when shopping.
Benefits
The main benefit of disability insurance is to replace part of your income if you ever become unable to work for an extended period. This can be especially important for the self-employed since there is no backup income if they cannot work. For example, employees often have access to paid time off or employer-provided disability insurance. Those who are self-employed do not have such benefits to fall back on.
Disability insurance can also help to keep your business alive by giving you’re the additional cash flow that you may need. Disability insurance may mean the difference between keeping a business going or having to close shop.
Proving Insurability
To qualify for disability insurance, you must prove your insurability to the insurance company. This includes meeting some basic requirements like being of good health with no preexisting conditions and being of an insurable age. Proof of a steady income must also be given to the insurance company. This may be done by presenting tax returns or by some other means that the insurance company requests.
Weigh Your Options
As with any other type of shopping, when shopping for disability insurance it is important to weigh your options. There are a few key things you should look for. First, you want to determine how long of an elimination period you would like. An elimination period refers to how long you must be unable to work before you will receive benefits. The shorter this time period is, the higher your premium will be. You will need to determine how long you can go before you will need the income replacement.
The second factor is your benefit period. This is how long your benefits will last. The longer your benefits period is, the higher your premium will be. You will need to determine what benefit period will make you comfortable, but you can also afford it.
Purchasing Disability Insurance for the Self-Employed
There are many factors that go into purchasing disability insurance for the self-employed. If you need help finding the best policy for you, meet with an insurance agent who can help you weigh your options.
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