Do I need disability insurance if I am self-employed?

Do I need disability insurance if I am self-employed?

If work you do yourself pays the household bills, disability insurance is how you replace part of that income when illness or injury keeps you from working. It is aimed at people 55 and under, and it is not health insurance.

• Self-employed people often have no employer plan. A 1099 worker does not get a paycheck if they cannot work, unless they have coverage of their own.
• A small business can depend on one person showing up. If the work stops, the income can stop with it.
• This does not pay doctor bills. A health plan is a different policy. See the health page or the start here guide.
• Accident and critical illness policies are not a paycheck. They pay set amounts for covered events. Accident and critical illness.

What does the benefit replace?

It pays a percentage of your income, not the whole paycheck. The NAIC describes a typical benefit as about 60% of earned income before the disability. Your policy can use a different percentage.

• The percentage is in the policy. The NAIC figure is a typical benefit, not a promise for your application. Other benefits, such as Social Security disability, can reduce what the policy pays if the contract says so.
• Self-employed income has to be shown. The carrier looks at what you earn and what you do. A tax return is often how that income is shown. The carrier decides what it will count.
• Taxes are a separate question. The NAIC says that, in general, benefits from an individual policy you pay for yourself are not taxed as income. An employer-paid group plan can be different. This page is not tax advice.

The benefit description is from the NAIC consumer guide to disability insurance. The disability page is where a quote request starts.

How is short-term coverage different from long-term coverage?

Short-term coverage is built for a shorter stretch. Long-term coverage is built to last longer, sometimes for years or to a set age. The policy states how long benefits can last.

• Short-term is the nearer gap. It is meant to cover a shorter time away from work. The contract states the months.
• Long-term is the longer gap. The NAIC says you generally choose a benefit length from one year to retirement age. A shorter length usually costs less, and benefits can run out while you are still unable to work.
• This page does not assign one length to every policy. Read the benefit period on the illustration before you apply.

What is an elimination period?

The elimination period is the time you wait after a disability starts before benefits begin. A longer wait generally means a lower premium, so match it to savings you can live on.

• A 30-day wait is a common example. The NAIC says a 30-day waiting period is common, and policies with a longer wait generally have lower premiums.
• A long wait needs savings behind it. If you cannot cover the household during the wait, a lower premium is a poor trade.
• The disability page calls this the waiting period. Same idea, plain name. See how the disability page describes it.

What does own occupation mean?

Own occupation means the policy can pay if you cannot do your own job, even if you could do a different one. Some policies use a stricter any-occupation rule, and some switch from one to the other. The policy states which definition you have.

• Own occupation looks at your job. The disability page uses the same meaning. It can matter when your income depends on a specific kind of work.
• Any occupation is stricter. It looks at work you could do with your training and experience, not only the job you had.
• A switch is possible. Some long-term policies start with own occupation and later use any occupation. Read that timing before you apply.

Is this for people over 55?

Branded Insurance Group places disability insurance for people 55 and under. The carrier still looks at your health, your work, and the income you can document.

• 55 and under is who this is aimed at. That is the age range on the disability page and on this guide.
• A call is not an approval. The carrier can accept you, offer a different benefit, or decline you. How buying works.
• Over 55 is a different conversation. Ask Seth what else can fit. This page does not offer a policy at every age.

Seth helps clients in Texas, Florida, Georgia, Tennessee, North Carolina, South Carolina, Virginia, West Virginia, Pennsylvania, Kentucky, Ohio, Colorado, Indiana, Illinois, Arkansas, and Louisiana. Not every policy is available in every state.