Business owners can ensure they will be able to continue making a living if they get sick or hurt by having disability insurance. This ensures that they continue to receive income in case they cannot work, regardless of whether or not they are able to return to their business when they recover.
You always think to buy insurance for your business, possessions and assets, but for many people their ability to earn an income is actually the most valuable asset that they have, particularly for younger business owners. If you are in your 30's or 40's and become disabled, your business and your income will suffer without protection potentially for a very long time.
Many entrepreneurs think that they are covered for disability insurance through their group benefits package if they have long term disability on their plan; however, quite often the group LTD coverage is not sufficient enough to properly insure them for their actual income. For these cases, it is a good idea to consider top up disability protection to make sure that your income is properly insured. Also, group LTD will typically only consider salary as insurable income whereas an individual disability plan can consider income from all sources (salary, dividends, bonuses, etc).
You should ask yourself the following questions:
- Would my business be able to operate efficiently if I am unable to work?
- How much would be needed in a salary to replace myself as an operator if I become disabled?
Disability insurance is often an overlooked insurance product even though it can be the most valuable to business owners to protect their business and overall financial well-being. Reach out to discuss the structure and options for you and your business.