Business disability insurance is an important part of providing protection for you and your employees, and of preserving the financial stability of your business. If you, as a business owner, become temporarily or permanently disabled, it is illegal for you to pay yourself ‘wages' that are tax-deductible. And, if one of your employees becomes disabled and you want to provide them with compensation, the compensation will not be tax-deductible either, unless you have a business disability insurance plan in place.
If you do have business disability insurance, and you become disabled, it is even possible for you to be reimbursed for things like rent on the space your business occupies, the salaries for your employees, property taxes, business insurance costs and more. Another perk is that the premiums you pay for business disability insurance are fully tax-deductible.
But before you can get an accurate business disability insurance quote, there are several decisions you will need to make. First, who will pay the business disability insurance premiums? If the premiums are paid by the employer, you will get the best deal on business disability insurance because the insurance company is guaranteed that everyone will have it; whereas if the employee must pay to have it, many of them may opt not to sign up for the policy. You can also choose to split the cost, which will lead to fewer employees opting out of the policy than if they are required to pay in full.
You must also decide who will be covered under the business disability insurance. Determine whether you want the business disability insurance to cover all your employees, or only certain classes of employees (many employers only provide benefits for full-time employees).
You don't even have to be the owner of a business to benefit from business disability insurance. Own occupation insurance is a form of business disability insurance for professionals who have invested a lot in their training. This allows them to receive disability benefits if they become unable to work in their own occupation, even if they are still capable of working in other occupations. Remember that one in four Americans becomes disabled before retirement age, and you could be one of them.
If you are looking for business disability insurance, there are some important terms you should be familiar with. The elimination period is how long you must wait after you are disabled, before you begin receiving benefits. The benefit period , is, as the name indicates, how long you will receive benefits for (this may range from several months to the rest of your life, depending on the option you select or how serious the disability is). The cost of living option will allow your benefits program to adjust for inflation. One deceptive-sounding term is if the policy is non-cancellable. This does not mean you are locked into your business disability insurance policy, it means that the insurance company is locked into it. If your policy is non-cancellable, the insurance company cannot end it as long as you continue to pay your premiums.
Business disability insurance is something that is not considered by many business owners, and even less likely to be considered by professionals who are not business owners, but both of these groups of people would be better off and more prepared for what life may bring if they signed up for business disability insurance policies.
By Riannon Cutler