Given the hoard of life insurance sellers (and the human concern with mortality), small business principals are moved to address their life insurance needs on a fairly regular basis. Unfortunately, that is not so with disability insurance.

Unless you have some particularly adverse health history or a fondness for sky diving with a well-worn & torn parachute, the odds of your dying anytime before your late sixties or early seventies are very long indeed. Insurers utilize a well known mathematical "Law of large numbers" to predict death rates with scary accuracy.  While a very small number of us will defy the odds and perish earlier, others will beat the odds on the other side, neither group being enough to affect insurer profits. This is why life insurance rates are almost unbelievably cheap, even for people well into their fifties and sixties with no clearly life-threatening habits or conditions.   (And mortality tables are currently being adjusted to reflect markedly increased life expectancy, a good reason to re-shop all your life insurance rates.)

Disability, however, is another matter entirely.  Stats say a 35-year old suffering a disability for at least 90 days is likely to be disabled for an average of three years. One of every seven workers will suffer a five-year or longer period of disability before age 65.  Every year, 12% of U.S. adults suffer a long-term disability.

Disability insurance is well known as something of a marginalized product in the insurance trade. Many Fire & Casualty agents consider it a line best left to Life & Health agents, with those guys thinking the reverse. It is a very costly form of insurance to maintain, because it insures a risk far more acute and unpredictable than death. Finally, small business owners are often considered problematic. Underwriters are very thorough in examining every detail of applications, medical history, etc., so obtaining insurance is a rather involved process.

If you are the central figure driving an enterprise, you are without question its foremost vulnerability, unless you have a ready replacement with an existing salary who can seamlessly assume command.

Rates for disability insurance vary according to amount, waiting period, disability definition (this varies considerably), rate guarantee terms, occupational class, health history, age, and income replacement period, among other factors. It is more readily available than ever, with more active carriers and somewhat better rates. It is still unaffordable to many proprietors. Even a modest amount, however, may be better than nothing. Look into voluntary state plans offered proprietors by your state employment bureaucracy. State plans are often a well-kept secret, but if you can locate one in the maze, it may suit your need nicely and at a very reasonable cost.

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