What would happen to your business if you had to have a hip replacement? How about sustaining a brain injury for six months? For small business owners, accidents and illnesses that result in a disability can be detrimental to your life and your business.
Disability insurance can be incredibly helpful in these circumstances. It will replace your income in the event of an accident or illness, and give you some peace of mind for your business as you navigate the challenges of your accident or illness.
A common misconception is that the government will take complete care of you and unfortunately, that isn’t the case. Qualifying for SSDI or workers comp is challenging, and the payout might not be what you expected. That’s why it’s important for small businesses to consider how much disability insurance you’ll need, and how much you can afford. It’s important to review your assets and liabilities, and assess your expenses to see how long you can go without income, and how you’ll be able to manage short term.
That being said, here are some suggestions to keep in mind if you’re a small business looking into disability insurance:
#1: Clarify what disability means for each insurance company. It’s always a good idea to compare each insurance provider’s definition of what disability means. Disability policies can often look different for each provider. For example, if you have skills that are transferable to another job and you are unable to perform your specific work, some policies will not consider you disabled. Look carefully to see if you will be covered by all occupations, and what the extent of the coverage looks like.
#2: Consider COLA. Selecting a cost of living adjustment (COLA) option will make sure your plan stays current as inflation increases. After filing a disability claim, your benefits will be adjusted each year according to the preset adjustment established in the rider.
#3: Look for group plans. It can also help to look into your industry associations for group plans. Many associations offer a variety of benefits including life and disability insurance.
#4: Don’t overlook guaranteed insurability. If you want to add more insurance in the future without more medical qualifying, consider going with the guaranteed insurability option.
#5: Make sure you understand what a non-cancelable policy is. If you want fixed premiums and benefits, you may want to consider a non-cancelable policy. This is the best option if you’re looking to lock in your costs and benefits. However it does come with a heftier price, so be weary of that!
#6. Do your research on reviews. Before you make the final decision in selecting disability insurance, make sure you’re doing your research on the carriers.
#7. Be careful of the waiting game. Increasing the waiting period or elimination period of the disability payout can lead to lower disability insurance costs. Take a look at your financial resources and determine how long you can make it before receiving benefits. Keep in mind, the first payment will usually be 30 days after your waiting period.
#8. Review any existing policies. It might be beneficial to review your life and mortgage insurance policies so you know what it might cost to add a disability rider on the policy. A waiver of premium rider can reduce your expenses if you become disabled.
#9. Consider a business overhead policy. A business overhead expense (BOE) plan is helpful for those who want income covered, but overhead items like payroll, benefits, rent, and utilities. This is a good option if you want to keep your business running while you recover from a disability.
#10. Find the right agent or broker. Insurance is complicated and constantly changing. Finding a good insurance broker or agent can help you find the best policy for your needs and guide you in the right direction.
We know that filing for benefits can be a long and frustrating process. At Disability Associates, we provide legal representation to disabled individuals who are seeking benefits. We are dedicated to taking the weight off your shoulders by simplifying the process. And there is absolutely no charge unless we win your case! Give us a call at 410) 686-2227, or contact us online today.