Disability insurance: Issues for those who work at home

sability insurance offers important protection many experts view as more beneficial than life insurance. In the event that you were to become disabled, and this disability-be it an injury or illness-prevented you from being able to work at your profession, how would you provide for yourself and your family and pay for living expenses? With disability insurance, you can, ideally, maintain your current lifestyle with the help of monthly benefits which are a percentage of the income you would be receiving if you were able to work. Because nearly every person must work to pay for their lifestyle and support their families, almost every person should consider obtaining disability insurance.

Disability insurance can be obtained either through your place of employment or on your own. Employers frequently offer disability insurance as part of a benefits package to their employees. This is how many people learn about the benefits of having disability insurance and obtain it.

However, what if you are self-employed and work from your home? Can you still obtain disability insurance? The answer is probably, but it can be difficult.

Although your reasons for obtaining disability insurance as someone who works from home will be no different than the reasons a person who is employed by someone else, your experiences of actually trying obtain coverage can be vastly different.

Difficulties Obtaining Coverage
The bottom line for a home-based business owner is that trying to obtain disability coverage is difficult. There are two main reasons for this:

1. The insurance company needs to protect itself from fraudulent claims;
2. The chances a person who works from home has of still being able to work after becoming injured or ill are very high.

Insurance companies must make money. They also, however, have an obligation to pay for approved claims. Because paying benefits for approved claims is very expensive, insurance companies have given themselves some cushion by limiting disability insurance availability to certain people with certain professions. The more dangerous your job, the less likely you are to be approved for disability insurance.
How dangerous though, is the work of a writer, a graphic designer, a piano teacher, or a consultant that works from their home? Compared to a roofer, an electrician, or someone who does motorcycle stunt-shows for a hobby, the dangers are practically non-existent. Nevertheless, in the eyes of insurance companies, their risk for losing money by paying for "disabilities" in the case of a home-based business owner is greater.
Unlike an employee who attends work everyday and whose attendance and absences are monitored by his or her employer, a person who works for themselves in their own home has the potential to abuse disability insurance coverage benefits, according to insurance companies. There have been many instances where a person decides to start a home-based business, gets disability insurance, then allows the business to fizzle. Therefore, when a disability did occur to that business owner, insurance companies were paying handsome benefits to someone who was spending their "work days" watching T.V. or tinkering around the house.

In many cases, disability insurance policies allow the payment of benefits to you if you lose the ability to work in your own profession. You do not need to prove to an insurance company that, technically, you could work in a job outside of your field that accommodates your disability. This is called "own-occupation", and is the definition of "disability" defined in some disability insurance policies. A disability can also be defined in a policy as "any occupation", which means when filing a disability claim you would have to prove that you were unable to work in any job because of your disability before you would be given disability benefits.
For a person who works at home and owns a disability policy that defines disability as any occupation, attempting to prove to the insurance company that you were unable to perform any of your duties because of an injury or illness could be difficult. Even in the event you were to become ill, injured, or in someway incapacitated, in the eyes of the insurance company, or even in your own eyes, you would most likely still be able to perform duties such as typing, dictating, sending faxes, mail, or email, and answering telephone calls. Therefore, you would not be granted any disability benefits.

Even with all of these hurdles in your way as a person who works from home, there still is a possibility that you can obtain disability insurance. Keep in mind these important points while you search for disability insurance:

- To be eligible for disability insurance as home-based business owner, you must be able to prove that you have been a legally operating business for at least 3 years;
- You are more likely to be able to obtain disability insurance if you do a large portion of your work on trips that take you outside of your home;
- When figuring the amount of money you may receive benefits for, an insurance company will use the amount of income you have indicated on your tax return only, even if you make more than that;
- Compare insurance policies from several companies;
- If at all possible, obtain disability insurance while an employee, before leaving to start a home-based business;
- If you are denied disability insurance, you can try to obtain it again;
- Try to accumulate enough personal savings to cover your living expenses in the event you become unable to work and cannot make an income for at least 6 months;
- You may be able to join an association associated with your profession that provides disability insurance to its members;
- There are insurance agents whose sole job is to help those who have a difficult time obtaining disability insurance, like a person who works at home, to purchase disability insurance.