Home Professionalisms Why Every Small Business Owner Needs Disability Insurance

Why Every Small Business Owner Needs Disability Insurance


by Richard Reich, President of Intramark Insurance

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May has finally arrived and that means that it’s time to mark Disability Insurance Awareness Month. As a small business owner, it’s important to prepare for the worst-case scenario, in which you’re no longer able to perform the duties essential to running your business. If you’re young and healthy, the idea of becoming disabled might seem like a remote possibility, but being in near-perfect health is actually the best time to purchase a policy.

Learn about the many reasons why you should consider purchasing disability insurance sooner rather than later.

Protecting Your Business in the Long-Term.

Signing up for disability insurance is about more than just protecting your personal finances; it’s also about protecting what’s most important to you: your business. Have you ever thought about what would happen to you and your business if you were disabled? Your ability to earn a living would be greatly diminished, which usually means going into debt. According to the Council for Disability Awareness, medical expenses accounted for 62% of all personal bankruptcies filed in the U.S. in 2007 and contributed to half of all home foreclose filings in 2006.

If your personal finances are tied up in your new business venture, you might have to dissolve the company or seek additional funding from a bank, a venture capitalist or another investor.

If you’re no longer able to perform the basic duties associated with running your business, either your employees will have to work overtime to make up the difference or your business will have to take on additional expenses to hire a replacement. In either scenario, your business will ultimately suffer in the long-term.

Purchasing disability insurance is the easiest way to prevent a potential disaster. A typical policy pays approximately 60% of your income (paid benefits are typically not taxable). You can use that money to stay on top of your bills, including a mortgage, car payment, your children’s education, medical expenses, and dozens of other potential expenses. With a good portion of your income accounted for, you won’t have to worry about using funds from your business to support yourself.

Save Money and Start Early.

Regardless of your age or the condition of your health, now is the time to purchase disability insurance. The younger and healthier you are, the lower your premiums will be. You can save money in the years ahead by locking in a lower rate while you’re still in your prime earning years. If you’re on the other end of the age spectrum, don’t let higher premiums scare you away from protecting your future. One accident or illness and you could lose your ability to earn a living for the rest of your working years, severely damaging your personal finances and the future of your business.

Finding a Policy That Works for You.

Depending on the nature of your small business, your chances of becoming disabled might be fairly low. If that’s the case, then you shouldn’t have to worry about paying exorbitant premiums. When you purchase disability insurance, the insurance provider will assign you a quote based on your line of work. If you’re working in a high-risk environment such as running your own wood shop, expect to pay a little more than an entrepreneur with a software start-up. Speaking with several disability insurance agents is a great way to get the ball rolling. You can ask about what kind of policy is right for you based on your specific needs.


Richard Reich

Richard Reich is President of Intramark Insurance, a provider of life insurance and disability insurance quotes. You can learn more and request a quote at www.protectyourincome.com.