What would you do if you were unable to work? What would this look like? You have no income. What would that be to your family? How would you pay your bills? How would you keep your business running if you’re owning a business? What would this look like for you? For most people, it’d be complete catastrophe.
Let’s say you got sick and couldn’t work for a year or two and no longer had any income coming in and no longer had the business running if you’re owning a business. For most people, it’s complete financial catastrophe. So what do we do? How do we ensure against this? How do we make sure that even if we got sick or injured we would still have income and the business could keep running?
This is where disability insurance becomes critical whether you own a business or not but especially if you own a business. For most people who are employees of a larger company disability insurance is provided as an employee benefit. That’s not always the case but for most major corporations, they give some form of disability insurance benefit to their employees. Most of the time it is a long-term disability benefit where you might get 50 to 60% of your salary if you became disabled. That’s not gonna cover everything but at least it’s something and then the planning step is to determine if that would be enough or if you need to go get more coverage on your own or through the supplemental plan that maybe the workplace offers.
For business owners, the situation’s a little bit more dire and urgent because typically there’s nothing there to cover you if you lose your income. You don’t have a employer paying your disability insurance giving that to you as an employee benefit. If you’re owning the business and running the business it’s on you to get disability insurance coverage so that way, if you get sick or if you get injured and you’re not able to work, your family still has income and your business can continue to operate until you’re able to return. So there’s two different pieces to this. The first is that the insurance allows your family to have income when you cannot generate it yourself. So if the business really requires you to be there and to be present and to be functioning and operating the business and all of a sudden you’re not able to do that, whether it’s an injury or heart attack or cancer or stroke, something serious that’s going to keep you out for a while, if it’s any of those things and the business requires you to be there to generate income, then we need to get you insurance to make sure that you have that income.
The second piece of that is that if you’re owning a business, you want to make sure that the business can stay in place and can keep operating and stay alive so that when you get back and you are unable to work it’s still there. The other piece of disability insurance is that they can provide some benefits to pay the bills of the business while you are out. So let’s say you have a whole bunch of employees and you go out sick but the business really requires you to be there to fully operate, let’s say you’re a dentist. You’re a dentist and you’re running your own practice and you have a staff. If you’re out, there’s still going to be hygienists there that can probably clean the patient’s teeth. It’s not necessarily going to come to a complete stop but there’s going to be some things that you cannot do. So what’s going to happen is the insurance will kick in. It can even provide for somebody to replace you temporarily, so it can pay the bill of actually bringing in a replacement for you. It can help pay the rent. It can help pay the staff. It’s going to help offset a lot of these expenses so that when you get healthy and you come back you haven’t loaded up on a bunch of debt or you haven’t had to necessarily let people go and lose their jobs and not be able to pay rent and just pay the basic bills of the business.
So business owners, especially, please hear me and go get disability insurance to cover your income for your family and also the bills of the business so that the business can keep operating while you are unable to work. Let’s move yourself from a place of potential financial catastrophe to knowing that no matter what happens to your health, you have income and the business can continue on. If you have any questions, please reach out to me. I’m happy to help.