Disability Insurance for Self Employed Professionals

November 11 ,2011 by admin

Unlike an employed individual who knows by the end of the month there is a paycheck coming, a self-employed individual has more responsibilities that come with the many benefits of being independent and being your own boss. Your ability as a self-employed person to wake up every day and report to your work is your most important financial asset, as it is your main source of income that will cater to your needs and those of your family.


A Notable responsibility of being self employed is the ability to protect and safeguard your major source of income. Of course you do not have an employer to rely on to give you the level of coverage and protection that you need on your income, meaning you will have no option but to do it yourself. Before buying disability insurance, it is important to consider the basic provisions that a self-employed is entitled to in the DI policy.


The first and most important provision of such a policy is the clear definition of total disability. This is what defines the circumstances under which a policy holder is entitled for benefits. Insurance companies have three basic definitions; however, as a self-employed individual, you should pay close attention to Own-occupation Disability. In this definition of a total disability, one is able to get benefits when unable to execute the main duties of their current livelihood.


The True Own-Occupation definition on the other hand is even much better, as it offers benefits if one is unable to perform the major duties of their existing occupation, even if one pursued other occupations and have other sources of income. Depending on your needs and specific duties at work, it could be very important to pay more attention to the True Own-occupation and not just the Own-occupation coverage. Regardless of what you opt for, Own-Occupation is the way to go as it covers your very OWN occupational duties.


In addition to the definition of total disability, you should also know of the two optional riders that each and every self-employed individual should have. Residual disability is the first one, and provides partial benefits for all partial disabilities. It goes without saying that partial disability claims are the commonest compared to their total disability claims counterparts. It also goes without saying therefore that buying a DI that does not have residual disability benefits is senseless and pointless.


Additionally, you should ensure that your DI policy provides not only partial benefits but also a recovery benefit for the full policy benefit duration. Based on your duties and the nature of your business or occupation, the full benefit period option could be more or less significant. When all is said and done, you should know that for you to qualify for a DI as a self employed professional, you will need to be in perfect health so you might want to take advantage of your perfect health status now and apply for a DI for self-employed people.


For working professional, consider obtain short term disability insurance to protect yourself.