We all rely on work to get paid, in order to cover our expenses and ensure a seamless living. The same goes for business owners. Even though business owners might be on the top of the chain within a company, which is certainly a good position, they still have to work every day and earn a living. But what happens if you’re unable to work?
An injury or an illness might prevent you from going to work and no work means no pay, in most cases. Legally speaking, you’re entitled to sick leave while still getting paid. But what about the long-term inability to work? This is where things tend to get a bit more complicated. Fortunately, you can always get insurance to protect yourself in such circumstances.
More specifically, income protection insurance can help both business owners and other individuals get paid even though they might not be able to work for a prolonged time period. With that in mind, here are a few tips for business owners regarding income protection insurance.
How does income protection works?
Income protection insurance will cover up to 75% of your pre-tax incomes if you get seriously injured or ill so that you’re unable to work for a while. This coverage will financially secure both yourself and your family during these difficult times.
The details of the policy depend on the insurance company, as well as your coverage plan. As an example, you may opt for a standard two-year policy or full coverage until you’re 65 years of age. You’re in control of what you pay for the policy which later determines the amount of payoffs when you’re unable to work.
However, one thing that’s important to keep in mind is that every insurer will have a waiting period in place before your income protection kicks in. That period can vary between 30 to 90 days. This is how long your sick leave usually is so you’re covered either way.
As with any other insurance policy, income protection insurers will try to assess the risk involved with your profession.
A high-risk profession is oftentimes not eligible for the income protection insurance due to the nature of that profession. In that case, you might consider choosing the right life insurance policies as an alternative.
Here are a few common professions that are deemed high-risk by insurers.
- Working at tall heights, such as the construction business.
- Working underground, such as mining.
- Working with heavy machinery.
- Serving in the armed forces.
- Working in any profession that’s within a war zone.
- Working with toxic chemicals or explosives.
- Working with firearms.
- Working in environments prone to diseases.
- Any dangerous profession, in general.
Again, which profession is deemed high-risk depends on the insurer and the amount of premiums you’re willing to pay for.
You can also cover your business
Another tip for business owners is that you can also cover your business with income protection insurance not just yourself.
As a key figure in your company, this can truly be a life-saver for your business while you’re away. That’s why it’s recommended to consider business expenses insurance alongside the income protection policy. As an example, here are a few things you can cover with this insurance.
- Any audit or accounting fees are covered.
- Administration expenses, such as postage, printing, as well as stationery.
- Bills, such as electricity, gas, heating, water, as well as cleaning services.
- Leasing costs for a plant and equipment.
- Any bank expense and interest rates if you have a loan.
Income protection insurance policy can be perceived as an extension for your sick leave. If you’re unable to work for more than three months, which is an average length of any legal sick leave, due to illness or injury, this insurance will help you out financially when it matters the most.
Guest Author, Raul Harman, s a B.Sc. in Innovative entrepreneurship and has a lot to say about innovations in all aspects of digital technology and online marketing. While he’s not enjoying travel, football and great food, you can find him on Technivorz.com.