If you decide to become, or are self employed, disability insurance is an absolute necessity. Even before you have a profit, you need to look into replacing some of your lost benefits. This is especially true with disability insurance because the self-employed business owner needs insurance too.
Why is it important for a self-employed person to buy self employed disability insurance? Because it is an assurance of financial aid to the businessperson if by some bad luck or due to illness or accident they become disabled for some time.
There are two main types of disability insurance for self employed people, with distinct differences:
- Long-Term Disability Insurance (LDI) covers any long-term disability. On many occasions, there is a longer waiting period with LDI, usually 30-180 days. The benefit period is also usually longer with LDI. The typical benefit span is 5 years, but can be extended up to retirement age. LDI pays up to 70% of your pre-tax income.
There are also 3 types of LDI. Own Occupation, Regular Occupation and Any Occupation coverage.
- Own Occupation covers your income from the job you were performing when you became disabled, even if you have another type of job.
- Regular Occupation covers your income in the job you have at the time of disability. You cannot be forced to take another position, and you get 100% of your income. If it is your choice to work in another position, your benefit will be adjusted accordingly.
- Any Occupation insurance is used when you cannot work at any job at all. This type is very strict and doesn’t typically come into play until you have been on Regular Occupational disability for at least 5 years.
- Short-Term Disability Insurance (SDI) is usually the best choice for the self-employed. SDI covers all short-term disabilities. This disability insurance usually has a two week waiting period, and usually has a benefit period of 13-26 weeks. Short-term disability insurance will also cover up to 100% of your income.
You must meet certain criteria to be eligible for disability insurance when you are self-employed, and we have the criteria outlined in a very effective manner making it easy for you to substantiate the need for disability insurance. Allow us here at SIG to research the SID or LID insurance thoroughly for you!
We are able to answer the many questions that you may have, and can locate the policy that is right for you and your business. Contact Us or Request A Quote and we will be in touch with you within 48 hours.