Why You Need Contractors Disability Insurance
Have you ever thought about what would happen to you if you were suddenly physically unable to work? Although nobody likes to think about it, the possibility of disability is one that can strike when least expected. According to the American Council of Life Insurers, the harsh reality is that one third of all Americans between the ages of 35 of 65 will become disabled for more than 90 days. In addition, one in seven workers will be disabled for more than five years.
Hence the need for guaranteed contractors disability insurance solutions that make sense. A major misconception about disabilities is that many people tend to think they are caused by freak accidents. The truth of the matter is that the majority of long-term work absences are often due to serious illnesses like cancer and heart disease.
Without handyman disability insurance and workman’s disability insurance, you are faced with a possible loss of income, which can be devastating to the financial stability of a household. The U.S. Department of Housing and Urban Development states that 46 percent of all home foreclosures are caused by some type of disability. To prevent such an unfortunate event from occurring, it is important to explore your disability insurance options.
What Contractors Disability Insurance Does
Disability insurance is designed to replace a portion of your income should you become disabled and are no longer able to work. Employers typically offer group plans that will replace up to 60 percent of your salary in the event of a disability. There are also common supplemental plans and individual disability insurance policies that can cover as much as 70 to 80 percent of your income.
Disability insurance benefits for contractors are slated to last for a set number of years, or until the insured person reaches retirement age. Benefits generally stop around retirement age, based on the notion that once you retire, you will no longer be dependent on your work-related income.
If the premium for contractor disability insurance is paid out-of-pocket by an individual, then benefits are tax-free. This would mean that the employer does not cover the premium costs.
Our Disability Insurance Specialties
General liability insurance is a state requirement for most contractors, even sole proprietors; additionally contractors with employees are required to obtain worker’s compensation insurance. The levels of coverage differ depending on the state and sector of construction.
Requirements for state and municipal contracts may be different than those for contracts with private parties. The minimum coverage recommended for most contractors and situations is $2 million.
Short-term disability insurance differs from long term in disability insurance in that it goes into effect as soon as you are unable to work due to an illness, injury, or birth of a child. Most employers commonly provide some type of short-term disability insurance coverage. This type of coverage ranges from as little as a few days to as much as one year. In many cases, the number of weeks you are eligible for the short-term disability insurance benefit is based upon how many years you have worked at the company. The longer you are employed at a company, typically the more paid sick leave you will be eligible to use.
The first thing you should do upon accepting a new job is to find out whether or not your contracting employer provides long-term disability insurance. Approximately half of mid- to large-sized companies in the U.S. today offer benefits that last for a minimum of five years, according to America’s Health Insurance Plans, an industry lobbyist. If you are lucky enough to have this type of coverage, it unfortunately may not meet all of your individual needs. Therefore, it is important to be fully educated on the precise amount of disability insurance you will need, and decide if your employer’s plan is sufficient for you.
If you are self employed, or otherwise not covered by your employer, it makes the most sense to purchase an individual disability insurance plan. Make sure the level of coverage you do have is enough, otherwise, you may need supplemental insurance. After all, most people may not be able to afford living on just 60 percent of their salary. What an individual plan will do is ensure at least another ten to twenty percent (10-20%) of your income. In some cases, you may be able to get individual coverage for a six-figure salary and a bonus – an option that is fairly unattainable with a group plan.
For more information, click for a free quote or call one of our contractors insurance specialists at 1-800-649-9094