Dane’s post on disability insurance got me thinking…
Disability insurance is important for any employee and especially for the self employed because they have no medical leave to fall back on.
As you’d guess with insurance, those who need it the most find it hardest to get.
Depending on how “white collar” your work is, the claims experience of people in your field, etc. the rates vary steeply.
Doctors used to be considered such good risks that they got the best rates… until they started cashing in those policies claiming mental disabilities and in essence, seemed to be using the plans in lieu of a retirement savings program.
Chiropractors were never considered good risks and had blue collar rates.
It may be different some now, but that’s how I remember it back when I sold disability insurance.
Since it’s hardest for entrepreneurs to get disabilty insurance other financial planning should compensate for it not being there…
1. Maybe you can get business overhead disability coverage if you can’t get personal coverage.
2. Remember the E-Myth and it’s remedy… systematize as much of your work as possible in case you are injured and must delegate
3. Keep your living expenses as low as possible with as large a cash reserve as possible… Dave Ramsey advocates 3 to 6 months’ worth.
4. Network now to learn whom you can “farm out work” to in the event of an emergency while keeping an override for yourself to keep income coming in.
5. Automate any income generation that you can… for instance if you have a website selling products and services which can also generate Google Adsense revenue without distracting from your main business, this may be something to consider.
6. Focus now on your most profitable activities and accounts and seek more of them to make steps 1- 5 happen faster while reducing the stress that may predispose you to being disabled.
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