• Underwriting is required. To obtain an individual disability insurance policy, you will need to go through the underwriting process, which involves providing information about your health, occupation, and other relevant factors.
• Tax-Free Benefits: The disability benefit payments from an individually owned policy is generally tax-free, as long as the premiums were paid with after-tax dollars.
• Individual disability insurance coverage is owned by you, the policyholder, so you can keep the policy if you leave your employer.
• Potential Dividends: Some individual disability insurance policies may be eligible for dividend payments, depending on the insurer and policy details.
• Income Replacement: These policies typically replace 50% to 70% of your salary, as well as other forms of compensation like bonuses and commissions.
Individual disability insurance is well-suited for several specific situations and types of individuals: Small Business Owners:
• Small business owners may not have the option to obtain group disability coverage through a large employer.
• Individual policies allow small business owners to secure customized disability income protection.
Self-Employed and High-Income Professionals:
• Self-employed individuals and high-income earners, such as certified professionals, are ideal candidates for individual disability insurance.
• These policies can replace a significant portion of their substantial incomes if they become disabled.
Primary Family Income Generators:
• Individual disability insurance is valuable for those who are the primary wage earners supporting their families.
• It helps ensure their loved ones are financially protected in the event of a disabling injury or illness.
Non-Salaried Workers:
Individual policies are well-suited for sales professionals, stock brokers, and others who earn income beyond just a base salary, such as through commissions and bonuses. These supplemental income streams can be incorporated into the disability coverage.
