Comments on: Disability Insurance for the Self-Employed – How to Get the Right Coverage

By: Jerry

Jerry — Sun, 25 Mar 2012 21:09:03 +0000

This is an often looked over insurance choice. But, it is very important if you are self-employed. You must have some way to support yourself or your family if you are unable to work. Having it leads to peace of mind so people should start to take a look at it more seriously.

By: Michelle

Michelle — Wed, 19 Oct 2011 16:32:38 +0000

Hi, I am a beautician, working out of my home. I have started getting cortisone shots in my hands because the tendons are wearing away, due to my work. They would like to do surgery but I am putting it off because if I’m not working, I’m not bringing in money. Do you think anyone would issue me disability insurance with this preexisting condition? Thanks , Michelle

By: Neal@Wealth Pilgrim

Neal@Wealth Pilgrim — Thu, 04 Nov 2010 13:46:51 +0000

Sadly…I am not.

By: Alfred

Alfred — Thu, 04 Nov 2010 12:51:30 +0000

Neal, are you aware of any associations or organizations that one can join that offer “Group” benefits of some sort?

By: Ethan

Ethan — Tue, 22 Jun 2010 02:51:09 +0000

Just a note on the after-tax nature of the benefits. As Neal points out, this assumes that the premiums were paid with after-tax money. If your company is paying for your disability insurance, make sure they are doing it on an after-tax basis! They should already be doing so – no good insurance broker would let them do otherwise. But you are the one that will take the loss if they aren’t, so make sure.

Also, consider an individual policy even if you have coverage through your work. You might have a great, paid policy through work for a decade or so – fine. But what if you leave that job when you are 40, and become self-employed? Disability insurance at that age is expensive even if you haven’t had any significant medical problems or prior claims. If you have, it’s downright prohibitive.

The bottom line: if you decide that disability insurance is part of your pre-65 financial plan, you need an individual policy. You can check on the portability feature of your company plan but generally they are mere toys thrown in to satisfy company requirements. They do not allow you to walk away from the company and maintain a flat premium rate til age 65, which is what you want.