Concerns for People who are Self-Employed:
- How would you cover your personal expenses if you were unable to work?
- How would you cover your overhead expenses if you were too sick or injured to run your business?
- If you have a business partner, what would happen if one of you were disabled? How would you fund a buy-out?
Different Types of Policies:
Individual Disability Insurance Policy:
This is the most important policy you can purchase. The policy will pay you a benefit if you can’t work. Typically pays a tax-free percentage of your income should you become disabled. This coverage is designed to provide adequate income if you cannot work.
Disability Overhead Expense Policy:
- Who would pay your bills?
- How long could your business last without you?
- How long could your business survive without an income stream?
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Disability Overhead Expense Insurance is designed to cover your overhead expenses if you were to become disabled.
Disability Buy-Out Policy:
This policy is designed to provide an income to buy out a business partner in the event of a disability. It’s usually not enough to just have an agreement if there is nothing to back it up financially.
