Challenges of Disability for the Self-Employed
Providing sufficient disability insurance for self-employed people can be challenging. This is especially true of the blue collar professionals who are in industries that are considered high risk to insurers.
We assist many clients who fit this category, and find that the traditional disability market does not adequately service them. This is true throughout the industry where certain vocations see higher potential for filing claims. Carriers who offer disability insurance want to know how much money you earn annually, how long you have been in the business, along with reviewing your current health status. This process takes a long time, and the end result is twofold. The amount of monthly benefit offered is not sufficient, and the premium is disproportionately high. One recent example was an offer of $4000 monthly benefit, for $6000 per year. Further, the premiums paid out for the policy are all post tax dollars.
Purchasing a catastrophic disability plan makes much more sense, especially for the trade professions noted above. This product does not care what you do, how much you earn, and medical underwriting is limited. Benefit qualifications are less likely as they are based upon not being able to perform certain activities of daily living. This results in affordable premiums, and rich monthly benefits. A $7500 benefit for an employee and his/her spouse in their 40′s quotes out at $1600 per year. Portions of the premium are tax deductible, while the benefit is tax free. Another advantage is that the monthly benefit, when triggered, comes directly to the beneficiary, and can be used for any expenses.
Our office can write these policies nationwide.