What is disability income insurance?
- Disability Income (DI) Insurance protects loss of income if you are out of work due to a disability. This is 24/7 worldwide protection.
What about Workers Compensation?
- Many small business owners “exclude” themselves from WC. A DI policy would be in your personal name and give you coverage on and off the job. Losing your income could be detrimental to your business’ ability to function.
What would it cover?
- DI policies typically cover about 60% of your salary and the policy will integrate with Social Security. The percentage changes based on your employment class and the amount of income you have to insure. 60% of your salary is a lot more than what most people have who are not covered – 0%.
- If the premium is paid by the employer, the premium is tax deductible
- If paid by the individual, once eligible, the benefit would be tax free
What are my options?
- There are many ways to customize your coverage and see what is most important to you. There are riders that can be added to the coverage, it can grow along with you and your business – examples of added coverages are
- Cost of living/inflation increases
- Business overhead expenses – reimbursement of costs for normal business operations
- Guaranteed insurability – allows you to increase the benefit as your income increases without showing proof of medical insurability
- Own occupation – lengthens the typical definition of disability to center around what you have been trained for, not based on how you can be retrained in a different field
- Policy Coordination – you can coordinate an individual plan and an employer sponsored plan if needed