As a small business owner, you may be too consumed with the day-to-day operations that you may forget about having the right coverage for your business, like with disability insurance. In the event that something happens to you and you cannot work, you will want to make sure you have a way to take care of yourself and your family.
If you are curious about what disability insurance is and what it covers, you came to the right place. This brief disability insurance guide will cover all you need to know about disability insurance and who you can contact for more information.
What Is Disability Insurance?
There are two types of disability insurance: long term and short term. Short-term disability replaces a portion of your income if you experience a severe illness or injury that keeps you out of work for a shorter period of time, while long-term would cover being out of work for longer periods. This includes permanent disabilities that make you unable to return to work.
Additional examples of long term disabilities:
- Cancer
- Diabetes
- Heart disease
- Musculoskeletal disorders
The waiting period for these benefits is typically between one month to six months. Benefit periods last between two to ten years. Some even last as long as until the day you turn 67.
Short Term Disability
Short-term disability replaces a portion of your income if you sustain an injury that temporarily prevents you from working. Examples of this are fractured wrists or other parts of your body.
Common short term disability claims:
- Pregnancies without complications
- Some mental illnesses
- Injury from an accident
- Surgery rehabilitation
Waiting periods may vary between one week to one month. Your benefits period may last between three to six months. Depending on your coverage and the insurer, it can last up to a year.
Group Disability Insurance
Running a successful business on your own is possible, but it comes with a lot of risks. For example, if you sustain a serious injury that keeps you from running your business, you could potentially lose a lot of business.
When you have a reputable disability insurance policy, you can use it to help replace the earnings lost due to a covered illness or injury. Suppose you are starting out your own business and you still work under another employer. In that case, you may be able to use their group disability insurance in the event of a covered injury or illness.
How Does Disability Insurance Work?
Disability insurance is an agreement between you and an insurance company that promises to pay you monthly if you suffer a covered illness or injury that affects your ability to work. This type of insurance is designed to replace a percentage of your income you will lose due to your inability to work.
Having a disability insurance policy will help you meet your financial obligations, such as paying bills, providing for your family, and covering household expenses. When you receive your policy, it will spell out how much you will pay each month for your premium and how the policy defines your disability.
Disability Definition
Some policies pay out monthly if you have an injury that prevents you from working your normal job, even if that injury does not prevent you from working elsewhere. Other policies won’t pay out unless you are too sick or disabled to do other types of jobs.
If you are able to perform another job, even if it pays less than what you currently make, specific disability policies won’t pay out. Make sure that you check out the fine print of your policy before you commit to anything.
How Much You Receive in Benefits
All policies will explain how much you should receive in benefits. Your benefit amount is a certain percentage of how much you take home in most cases. Most policies pay between 60% to 80% of your income received before your disability.
Benefit Period
As mentioned earlier, depending on the type of disability policy you have, your benefits could last months, whereas others could last years. Some policies stop at a certain age, typically in the 60s.
What Does Disability Insurance Cover?
Disability insurance covers illnesses and injuries that limit your ability to complete your job. Certain types of other disabilities that your policy may cover are:
- Depression
- Back pain
- Stroke
- Heart disease
- Cancer
- Arthritis
A good percentage of claims filed for disability benefits stem from medical illnesses. If you aren’t sure what your policy defines as a covered disability, you may want to reach out to your insurer.
How to Get Disability Insurance
Someone who works in a corporate setting typically goes to their HR department to learn about their group disability insurance coverage, but small business owners don’t have the same luxury. Instead, you will need to reach out to an independent individual insurance agent or an insurance company. When looking for disability insurance, make sure you take a look at the company’s reviews and ensure that they have the proper licenses to sell insurance.
Purchase the Best Disability Insurance
Life is unpredictable, and there are many chances where you could possibly sustain a serious injury or illness. If this happens, you want to make sure that you have more than enough to keep yourself, your family, and your business afloat.
The best way to do this is to partner with a reputable insurance company, like Kicker Insures Me Agency that can walk you through the best disability benefits for you. Contact us now if you are ready to learn more about disability insurance and how much you can save on your premiums. Our team is prepared to answer any questions or concerns you have about your new disability insurance policy. Contact us at (281) 487-9686.