Disability Income for the Self-Employed Protecting your ability to earn an income is more important as a business owner than as an employee. If you can no longer work, even for a short time, your business could be in jeopardy. The longer you have to be off work, the more difficult it is to keep your business going. If this sounds alien to your ears, consider this. If your business can run so well without you, why was your last vacation so short? Why? Because you had to get back to the business. Why didn't you take a month off? Or two months? The problem with obtaining disability income as a new business owner is that you don't qualify for coverage. Insurance companies do not want to insure whether you can be a success at your new enterprise. Depending on the company, most will require a minimum of one year and most require two years for a new business owner to even be eligible. There are a few exceptions to that rule. If you are doing what you have been doing for someone else for a period of time, only for yourself it is possible to argue for an exception. Think about it and it makes sense. Most new businesses do not make it beyond one year much less two. But if you already know how to do what you are doing, and you have a lot of experience, the insurance companies will recognize that, sometimes. It is best if you are thinking of going into business for yourself and you now work for someone else, review your disability income program BEFORE you leave that employer. When you do qualify for coverage here are some points to consider: Disability Income comes in two flavors Guaranteed Renewable The coverage can not be changed by the insurance company BUT the premiums can be Noncancellable and Guaranteed Renewable The insurance company cannot change the coverage or the premiums The most expensive due to the guaranteed premium Having disability is better than not having it regardless of the product Options to include Benefit period to age 65 (or the longest period you can) Residual and/or partial to cover a disability that does not totally disable you Cost of Living (COLA) - to increase the benefit after 12 months of disability by inflation Update or whatever the company calls it to allow you to increase your benefit each year by inflation Your occupation definition of disability for as long as you can Other Disability Income to consider Business Overhead Expense (BOE) to pay for business expenses to keep the doors open and not force you to pay for business expenses from your personal disability income check. Who should you buy your coverage from? Seek out an insurance agent the really knows this business, there are numerous companies that sell disability income, they are not all created equally. Disability income is a promise to pay. The promise is the contract. Get the best one you can. Buy from a large well known company that specializes in the product Pay for the coverage from your personal accounts If the business pays for it and the premiums are not income, then the benefits are subject to  income taxes at the time of benefit. Is is better to pay taxes on $5,000 a month of benefit, or on a $1500 annual premium.