YOU ASK:

Can I get disability insurance if I'm self-employed?

WE ANSWER:

Yes, you can. In fact, we highly recommend that you do. Those who are self-employed are naturally responsible for ensuring that they have a comprehensive "employee-benefits" package that should include health insurance, life insurance and, of course, disability insurance.

You need to note that you may need two types of disability insurance - short term and long term. This will ensure income protection even if your disability is only for a short period or if that disability continues on for an indeterminate length of time.

When you are in the market for disability insurance, here are some factors you should consider:

  • Premiums.

    You should try to balance affordability with the set of benefits the policy can provide. You can get discounts if you opt for a longer waiting period or a more exacting definition of disability.

  • Waiting Period.

    This refers to the period wherein you will have to use other alternative sources besides your expected disability insurance benefits. When given the option on the waiting period, you should think about how long your savings or other resources will last as they serve as a replacement to your lost income.

  • Amount or percentage of benefits.

    Disability insurance benefits are usually set as a percentage of your gross income. The percentage will range from 50% to 85%. This rate is multiplied to your income to get how much insurance will pay you on a monthly basis.

  • Definition of disability.

    It depends on how you want disability to be defined. When you have an "Own Occupation" disability policy, you get paid insurance benefits if you are not able to perform your own occupation. For example, if you work by providing voice-overs on the radio and temporarily lose your voice due to an accident, insurance will pay you. You also can find alternative jobs.

    Meanwhile, if you have an "Any Occupation" policy, the disability should be such that you can't perform tasks for any job, not just for your own occupation. So, going back to our example, if you lose your voice but can still type and do dictation, you are not considered disabled since you can perform other tasks that can be used to find another kind of job.

  • Guarantees.

    You need to check whether the policy offers guaranteed renewability. That way, even if you get sick before renewal time comes, you still can be assured that the policy is renewed. If a policy is renewable and non-cancellable, the insurance company not only has to renew the policy but it can't change your premiums, even if you get sick.

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