I posted not long ago that a business owner’s number 1 asset is their health.
That was highlighted in the past week, when I sprained my ankle, and I spent yesterday at a hospital with a good friend, who has news of suspected cancer.
Accidents like mine happen in a second. I don’t have a sexy, funny story; I was gardening and slipped over and sprained my ankle.
So very boring, mundane and doddery!
But I have spent the last week on crutches, icing and elevating my foot and visiting the physiotherapist.
My friend spent Friday at the imaging clinic, Saturday at the doctors and Tuesday at the hospital.
In between those times, she has lost a lot of sleep, as you can imagine, and so has her family. They are now nervously awaiting the biopsy results and trying to work, live life and not stress out.
In essence, these 2 health issues were not foreseen, like most are and they are having an impact on my life and my friend’s life.
Where disability insurance comes into play, is that you can get monthly income if you get sick or injured. It helps offset the cost of these appointments and also to cover the lost income or to help pay for the staff required to cover you.
There are some things you need to know about disability insurance though, ESPECIALLY for business owners:
Don’t pay for the insurance through your company: Here in Canada, if your business pays for it and you get a payout, then that money is classed as income for the business and you need to pay tax on it. Get the insurance in your personal name and there is not a tax requirement on a payout to you. Just take a draw or increase your wage to cover the premium cost. Yes, that will create a tax requirement on your personal taxes, but it is better on $1000 premium than a $8000 pay out.
You need to consider coverage for accident AND illness: My ankle would be classed as an accident, my friend’s cancer is classed as an illness. As we age, the likelihood of illness being an issue versus an accident, is higher, so make sure you have BOTH classes of coverage.
The most frequent accident injuries are soft tissue. Find a policy that DOES NOT LIMIT SOFT TISSUE INJURIES: Sprained ankles, blown out knees, back strains, these are all soft tissue injuries and some insurers will limit your payout amounts on these, because they are the most frequent! I have included a link to an insurer that does not limit soft tissue claims. (It is the company that I used to work for, so this is how I know all this, by the way!)
So, I know this post may have made you roll your eyes and yawn, BUT life insurance for most people is a no brainer, and for business owners that are the main breadwinners for their families, you SHOULD consider this too.
It is actually MORE LIKELY that you will get sick or injured than die. A good thing too, yes?!!
Til next time guys, stay healthy!