If You Are Self-Employed Then You Should Choose Disability Insurance
Posted by Tom Carolan on Mon, Nov 16, 2009 @ 11:37 AM
If you are currently operating a business and you are self-employed, then being without disability insurance can be very detrimental to you financially. In addition, if you have a few employees, your business could easily go into bankruptcy and you would have no way to reimburse them if you became unable to work. Or even worse, you could become homeless and left with nothing.
Disability insurance is the only way to protect you and your business from these horrible scenarios. There are three different types of disability insurance, so learn about each type.
Different types of disability insurance
The three different types of disability insurance available are Own-Occupation Disability Insurance, Income Replacement Insurance, and Gainful Occupation Coverage. The first, Own-Occupation Disability Insurance, is the only form of disability insurance that will not punish you if you return to work in a different occupation while you are under a claim.
This is extremely important if you develop a disability and if you, like most people, do not want to be confined to your house for an extended period of time. So, with Own-Occupation Disability Insurance, you have the ability to return to work at a job where you can perform the duties and not be considered disabled.
Income Replacement Insurance is the second type of disability insurance. This option is the most common disability insurance type offered by insurance companies today. Under this type, you are penalized if you return to work or another income source while under an insurance claim.
The penalty for this situation is usually a decrease in your monthly check, as the insurance company will take off a portion of what they owe you based on your supplemental income.
The worst disability insurance option
Gainful Occupation Coverage is the third type of disability insurance. This option is the worst because it loosely defines the term disability. The trouble with this explanation is that it can be subject to the interpretation of the insurance company. If you believe you are reasonably able work due to education, training or experience-the insurance company may think differently. In theory, the insurance company could deem you unable to be a dish washer at a restaurant when you believe your injury or illness does not prevent you from performing that task. Sometimes these situations do occur, but it is doubtful the insurance company would go that far to prevent you from earning an income.
Once again, if you are self-employed then it is critical that you obtain a disability insurance policy. However, do not be foolish and pick the cheapest policy available because the policy may only cover a portion of the many costs involved with a disability. It is wise to shop around for a policy before you make your purchase. This ensures that you get the most value for your money. Hopefully, you will be able to afford the best coverage with an Own-Occupation Disability Insurance policy because it is undoubtedly the best option available today.
More Information:
How To Buy Disability Insurance