Disability Benefits for Independent Contractors

KineticParadox Updated: 2025-06-10

Through the group plan offered by their company, a large number of people—including independent contractors—may be eligible for disability insurance. They can purchase a personal disability insurance policy if not.
Different definitions of disability (own-occupation, any-occupation), waiting periods, and other elements may be included in individual disability insurance policies. A few also have riders, which are add-ons that broaden the policy's coverage or provide new advantages.

Disability Insurance: What Is It?

Disability insurance provides financial security in the event that a sickness or disability prevents you from working. It could be offered by an association, a workplace plan, or as a standalone private policy bought from a financial advisor.
Disability insurance comes in two primary varieties: short-term and long-term. Long-term disability policies frequently provide benefits through retirement age, although short-term disability policies normally pay out for up to a year.
Additionally, some disability policies have riders or extra features that can expand coverage and lower the policy's cost. Depending on the carrier, these features can include:
Your eligibility for benefits will depend on how a disability policy defines disability. Certain plans apply a "own-occupation" definition; in order to be eligible, you must be unable to carry out the responsibilities of your own occupation. The cost of this is usually lower than that of a "any-occupation" definition. A financial expert can assist you in weighing your alternatives and selecting the best one for you.

How Do Self-Employed People Get Disability Insurance?

If they suffer from a crippling disease or accident, independent contractors may be eligible for Social Security disability benefits just like regular employees. To receive these advantages, businesses must, however, fulfill a few technological conditions. They need to have sufficient job credits and pay Social Security taxes.
A lot of individual long-term disability insurance plans have add-ons, or riders, that allow you to personalize your policy. They can add more benefits, prolong the elimination period, enhance benefits in line with the cost of living, and expand coverage without requiring further underwriting. Usually, these riders raise the policy's total cost.
The amount of time that has to elapse before disability benefits start is known as the elimination period. Benefit periods under long-term disability insurance policies might last for years or until retirement age. In contrast, short-term disability insurance usually only provides payments for a period of three to six months. Because longer-term coverage provides more substantial income protection than short-term coverage, many consumers opt for it.

Which disability insurance plan is best for people who work for themselves?

It's crucial to have coverage, even though it could be more challenging for self-employed individuals to be approved for disability insurance. In the event that a sickness or disability prevents you from working, it helps to safeguard your income.
You'll probably need to provide tax returns and proof of income in order to obtain a policy. A non-invasive medical examination will also be conducted by the insurance company.
Numerous insurance plans provide add-on riders that can enhance your coverage even more. These consist of premium returns, cost-of-living hikes, and other things.
Consult a financial expert to ensure that your coverage is appropriately customized for your particular circumstances. They can assist you in choosing between the own-occupation and any-occupation definitions of total disability, as well as figuring out how much coverage you actually need. Your options for both long-term and short-term disability insurance can also be reviewed by them. These are determined by your lifestyle, health, and income. Having adequate disability insurance can help you maintain the financial stability of your family and your business.

How Can Self-Employed Individuals Apply for Disability Insurance?

Disability insurance is available to freelancers, contractors, and sole proprietors alike. Either a group plan or your own policy will provide it to you. Although individual insurance may be more expensive, you will have greater control over the coverage you choose, including the waiting period and the definition of total disability. Additionally, you can incorporate riders, like a return of premium riders or an automatic benefit rise.
Your income tax records from the last two to three years will be examined by the underwriter when you apply for a personal disability insurance policy. After evaluating your risk, they will determine how much income they can provide you as a policyholder by calculating your net worth.
Your price will be heavily influenced by the kind of work you do; those in physically demanding jobs, like construction workers, usually have higher premiums. Additionally, you have the option of using either the own-occupation or the any-occupation definition of total disability; the former is more restricted and the latter more accommodating.