More than half of U.S. workers are covered by an employer-sponsored long-term disability insurance policy. Although 41 percent of workers believe the benefit from such a policy would fall short of their family’s needs, it’s likely that their job might still exist when they were well enough to return to work. However, a business owner may face different circumstances in the event of a disability. In addition to living expenses, a business owner might also have contracts, debts, and overhead expenses to meet. If he or she was unable to work for an extended period, there might be no business to return to.

One way to protect yourself financially in the event of a disability is by purchasing an individual disability income insurance policy. This kind of coverage can be structured to meet a variety of needs.

An individual disability policy typically will replace a percentage of pre-disability income if an accident or illness renders the insured unable to work. This kind of policy is frequently sold to self-employed or highly paid workers to supplement basic coverage provided by an employer.

How Disability Insurance Works

Key-person disability insurance can be used for protection when an essential employee or business owner is unable to work. The benefit can be paid either to the disabled person to replace lost income or to the business to offset the lost productivity.

Disability buy-sell insurance pays a benefit to the business that the owners can use to buy the business from a co-owner or partner who becomes disabled.

Reducing term disability insurance can help cover payments on loans or other commitments. The policy typically stays in effect for the term of the obligation, and the benefit is gradually reduced as the balance is paid down.

Of course, the premium amount for disability insurance will depend on factors such as your health, age, gender, income and occupation. You may be required to disclose your medical history and submit to a physical exam.

Disability Insurance Protection Statistically Advisable

Forty-five percent of Americans will suffer a serious disability between the ages of 35 and 65. A disability income insurance policy may be able to help you stay in business and protect your income if you or someone you depend on someday become unable to continue working.