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Why Self-Employed Individuals Need Disability Insurance.

Having your own business gives you the chance to be both an employer and an owner. This is your chance to build your own business from the ground up and leave something behind for your loved ones. Therefore, you must always be available to work, but what happens if you get sick or injured? When disaster strikes, it is crucial to have a plan in place to protect you and your business. In the event of serious illnesses and injuries, disability insurance policies provide a reliable safety net.

Let's Break It Down

Your business thrives best when you're present to oversee operations. You're the manager, visionary, and essential employee. When you're absent, your work suffers, which impacts your personal income. This in turn makes it difficult to take care of yourself and your family.

Disability insurance works when you can’t. If an illness or accident keeps you from working, disability insurance can give you a monthly benefit to help you pay your expenses by replacing some of your earnings.

Purchasing disability insurance for your business can help keep operations running smoothly and cover expenses if an illness or injury keeps you or a key employee from working. It can replace your income, cover overhead expenses, and help you attract qualified candidates with a more competitive compensation package. You may also be able to deduct your premiums, depending on the type of plan and how it is set up. Most importantly, you’ve insured the people instrumental to the continued success of your business.

How Do Disability Insurance Policies Work?

Disability insurance can be customized to meet your needs with optional benefits. If you become disabled, the first step is to file a claim. If your claim is approved, you will begin to receive monthly payments, once the waiting period ends. The waiting period, chosen at the time you apply, is the number of days from the date you’re disabled until your monthly payments start. Benefits continue, while you satisfy the terms of the policy, until the end of the benefit period.

Types of Business Disability Insurance

Overhead Expense Plan

This policy covers eligible business overhead expenses during total disability. This option is best for owners with monthly business expenses and could last for 1 or 2 years. It helps you retain valued staff, pay ongoing expenses and avoids disruption to your business. For example, business overhead expense insurance will reimburse you for rent, property taxes, utilities, office supplies, and more. Covering these costs will allow business operations to continue until you either return to work or decide on the future of your business.

Buy/Sell Agreement For Private Businesses

This plan is ideal for owners of a privately held business to protect you and your business partner(s) if either of you becomes disabled. There are two benefit payment options, a single, lump-sum payment and/or monthly payments for 60 months. Benefits under this plan include funds to purchase the shares or ownership interest of a totally disabled shareholder or partner. It also reassures suppliers, creditors, shareholders or partners. Business stakeholders can rest assured that should a key partner become disabled, their share of the business can be bought out and the business can continue.

According to Canada Life, Up to 40% of Canadians become disabled for 90 days or longer before age 65.

Let's connect today to learn more about disability insurance and how it can help protect you, your employees and your business.


The information contained in these articles are for general information purposes only. Nicole Marques assumes no responsibility for errors or omissions in the contents of the Service. In no event shall Nicole Marques be liable for any special, direct, indirect, consequential, or incidental damages or any damages whatsoever, whether in an action of contract, negligence or other tort, arising out of or in connection with the information provided in this article. Nicole Marques reserves the right to make additions, deletions, or modifications to the contents on the Service at any time without prior notice. The information provided above is for general information only. It is not to be relied upon as providing legal or tax advice. You are encouraged to consult with a professional tax and/or legal advisor and/or financial advisor about your particular circumstances.

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