Man on oxygen in hospital bed with young daughter holding his hand

The Difference Between Short-Term and Long-Term Disability Insurance

Life doesn’t always go as planned. As a self employed individual, you probably know this better than anyone. You had to work through lots of obstacles — expected and unexpected — to get where you are now. And now that you have a successful business and achieved financial strength, you need to protect it. Disability insurance for the self employed is your best bet.

In this article, we’ll discuss how self employed individuals can benefit from disability insurance, as well as how to choose the best disability insurance for your self employed business.

What is disability insurance?

Disability insurance for self employed workers helps cover your living expenses if a covered serious injury or illness makes working impossible. You pay a monthly premium based on your coverage needs and, if you are ever unable to work for an extended period of time because of a covered injury or illness, you will receive disability benefits after any waiting period (a.k.a. elimination period) requirements are met.

What is the definition of a disability?

In order to qualify for disability insurance benefits as a self employed individual, you need to experience a covered severe illness or injury that prevents you from doing your job or any job, depending on the policy.

In order to qualify as a disability, the sickness or injury experienced would have to lead to an inability to work at your regular occupation or any job.

What is the difference between short term and long term disability insurance?

The primary difference between short and long term disability is the benefit period, or the amount of time you may receive benefits.

Short Term Disability Insurance for the Self Employed

Short-term disability has a shorter benefit period and is typically used for injuries or covered illnesses the individual is expected to recover from.

Long Term Disability Insurance

Long-term disability insurance has a much longer benefit period. Individuals who need assistance for years — or even for the rest of their lives — can benefit from a long-term disability policy. Long-term disability insurance for the self-employed can be a lifesaver if a covered illness or injury keeps you from working on your business and receiving a paycheck.

There are also other types of disability insurance policies to consider, such as own occupation disability insurance, any occupation disability insurance, state disability insurance and social security disability insurance.  Not sure what disability insurance you need as a self employed worker?  Not to worry!  Read our article answering common questions about Disability Insurance Policy Types to determine which is the best disability policy for you.

How does being self employed affect disability insurance?

As a self employed individual, you often don’t have the security net that employees of large corporations do. You don’t have paid time off or sick days, so if you don’t show up to work for multiple days or weeks, you don’t get a paycheck. Plus, if you’re at home recovering for a long time, you could lose your business that you’ve worked so hard to build.  Learn more about self employed disability insurance on our Disability Insurance Product page.

What is the cost of disability insurance?

The cost of disability insurance varies based on a few different factors, such as:

  • Income: Since disability insurance is meant to help cover your living expenses, your current income and expenses matter when calculating your premium. The higher your income and living expenses, the higher premiums you should pay for disability insurance so that you can receive an adequate amount of disability benefits if you were to need them.
  • Age: Your age is a risk factor that may increase your disability insurance premiums. The older you are, the more likely you are to experience a debilitating illness.
  • Health status: If you are currently experiencing health difficulties, or if you are at risk of experiencing health problems, your premium may be higher, or you may not be insurable for a period of time.

To learn more about what you might pay for a disability policy, you can obtain a free quote here.

Who needs disability insurance?

Anyone who relies on personal work income and has a chance of experiencing an injury or illness in their lifetime should have disability insurance. And, since none of us can really predict when an accident is going to happen, anyone who works usually needs disability insurance. Disability income insurance is especially essential for independent workers and those who run their own business. It works as a safeguard for you and your livelihood.

What isn’t covered by disability insurance?

Like all insurance plans, disability insurance plans have limitations and exclusions with their coverage. The disability insurance for independent contractors often does not cover loss of income due to the following situations:

  • Pregnancy, childbirth, or an elective abortion
  • Losing an occupational or professional license or certification
  • Being exposed to war
  • Engaging in an illegal occupation
  • Participating in or attempting a felony
  • Intentionally self-inflicting an illness or injury
  • Committing suicide, or attempting suicide
  • Being incarcerated
  • Being under the influence of alcohol or drugs
  • Actively serving in the armed forces

For more information, we also have an entire article dedicated to answering common questions about Disability Insurance Coverage.

What is the best disability insurance for self employed workers?

Woligo has partnered with Assurity to offer you the very best disability insurance for self employed workers.  Having disability insurance gives you some protection and peace of mind. If you’re interested in a policy, visit our Disability Product Page to learn more and obtain a free quote in just seconds.