Being self-employed has many advantages, but purchasing disability insurance for groups isn’t one of the advantages. However, that doesn’t mean self-employed people don’t require disability insurance less than regular employees.
What would you do to support your family if a disability hinders your ability to work for a long time? If you’re severely injured or seriously ill, the disability insurance available to self-employed workers can be a lifesaver.
It could aid you in covering your expenses and keep your business in business while you recuperate.
What Independent Contractors Should Understand About Long-Term Disability Insurance
Insurance policies for disability are short-term or longer-term. Short-term disability insurance gets designed to cover the temporary loss of income caused by injury or illness. The majority of policies provide benefits for up to 6 months. Long-term disability insurance, by contrast, gives a constant income stream for longer lengths of time, such as two, five, or ten years or until retirement.
Long-term disability insurance is better protection against income loss than short-term insurance as the replacement income is longer, and the costs may be comparable. It is why it must include in any financial plan for professionals.
Long-term disability insurance plans replace some of your earnings before you suffer a disability. They typically range between 60% and 80% of your total income. Because the insurance company directly deposits the funds into your account at the bank and you’re free to use the money in any way you’d like.
Long-term disability insurance will cover all medical conditions that stop you from working for extended lengths of time. The exact details of what constitutes total disability will differ based on the insurance company you choose to use.
Many people believe that long-term disability only makes sense for people who work in a dangerous jobs, but that could be further than the fact. Research has shown that all disabilities get caused by illness rather than accidents.
Here are a few typical medical conditions that qualify for long-term disability insurance:
- Multiple Sclerosis
- Cancer
- Chronic Fatigue Syndrome
- Bipolar Disorder
- Fibromyalgia
- Crohn’s Disease
- Lupus
- HIV/AIDS
- Degenerative disc disease
Do I Qualify for Disability Insurance If I Am Self-Employed?
Of course, you can. The process of purchasing the individual insurance policy for self-employed people is similar to that of employees. Self-employment does not automatically make obtaining disability insurance any more challenging.
The insurance company will base its coverage decision on the following factors:
- Your gender, age, and overall health
- Your annual earnings
- The field in which you, the area in which you
If you’re a business manager, the insurance company will also consider your business’s annual earnings and the total staff quantity.
Disability Insurance Benefits for Contract Employees as Well as Freelancers
In most cases, freelancers and independent contractors don’t own a business and are not legal employees of a firm. It includes freelance journalists and personal trainers, freelance writers and artists, freelance website developers, and rideshare drivers. Disability insurance is just as essential for them as it is for an employee who is salaried or a business owner. In the event of disability insurance, it can assist them in covering their expenses and help them live comfortably.
Contract and freelance workers may get considered for disability insurance provided they provide evidence of up to three years of income from freelance work. Financial underwriting for these workers is comparable to that for entrepreneurs. Insurance companies will review your most recent 2 or 3 years of income tax returns to determine your annual average income. Based on your average yearly pay, they’ll decide what amount of insurance coverage they will offer to you.
Is Disability Insurance Worth It for Self-Employed Employees?
Insurance for disabled people gets recommended to anyone who makes a salary. If you are self-employed, it’s required.
Although working for yourself has numerous advantages, such as the group disability insurance provided to traditional workers, you cannot take advantage of some advantages. A disability insurance policy for individuals and a business overhead insurance policy can help keep your business protected and maintain financial stability throughout your life.
Conclusion
Disability insurance for self-employed employees will help safeguard your family and ensure your business can continue operating should you experience a disability. It will replace a portion of your pre-disability earnings to offset the financial consequences of an accident or illness. Contact Ottawa Life Insurance to understand your needs for disability insurance and discover the most suitable policy at a cost-effective price. Call us at (613) 454-1424, or you can also send mail at info@ottawa-lifeinsurance.ca for additional information.
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