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How disability insurance can protect your future paycheck


If you are 30 years old, you have a 54% chance of developing a disability at some point during your working life. In fact, the risk of disability before retirement is significantly higher than death. 

For most people, disabilities put them out of work for two to three years, which can be financially devastating when you have bills to pay or a business to run. 

A disability can be classified as anything that prevents you from working. It could be injuries from an accident, a chronic health condition, depression, or cancer. If you’ve had COVID-19 you could develop unforeseen side effects in the future that could prevent you from working. A disability can happen to anyone, so it’s critical to take steps now while you can.

Receive Tax-Free Cash With Disability Benefits

Fortunately, there is a way to protect your personal income and your business earnings if you’re unable to work. Disability insurance is designed to pay you tax-free cash over the course of two, five, or ten years and even until retirement depending on the policy. 

Like with any other kind of insurance, you pay premiums and the insurance company will pay you if you make a claim. You can usually receive 60% to 80% of your net, after-tax income, which is extremely beneficial if you have rent, mortgage payments, or business expenses. 

Most employed people are covered by their employer, but if you are self-employed, or a small business owner, you have to find disability insurance yourself. One in three Canadians end up using their disability benefits before they retire, so it’s crucial that you get yourself covered. It is the most important type of insurance that a small business owner needs. 

While no one can predict tragic accidents, developing a debilitating health condition is more common than you might think, especially as you get older. 

Disability Coverage For Business Expenses

If you develop a disability and can’t work, not only do you have personal expenses to think about but you have business expenses too. The last thing you’d want is for all your time, money, and energy that you poured into starting your business to be wasted. To see your business suddenly fail because you couldn’t keep it afloat financially would be devastating to anyone. 

There are two types of insurance to help you keep yourself and your business alive during a period of disability. 

Individual Disability Income Insurance 

This is an individual policy with an insurance company that protects your personal income from injury or illness. With this policy, you will usually receive 60% to 80% of your salary. The benefit is usually tax-free unless paid for with pre-tax dollars. 

Business Overhead Expense Disability Insurance 

To protect business expenses you’ll need this type of disability insurance. You can be reimbursed up to 100% of recurring monthly business expenses including rent for your business premises, property taxes, salaries of your employees, utilities, leases on vehicles, amongst others. 

This type of insurance policy is designed specifically to help your business stay up and running if you’re unable to work. That’s why this disability insurance is a no-brainer for any small business owner.

How Much Does Disability Insurance For Small Business Owners Cost?

Typical disability coverage costs between 1% to 3% of your income. That means if you are relatively healthy and in your thirties, earning around $50,000 a year, you could pay around $25/month for an individual disability policy. 

One in three Canadians will use their disability benefits, so you want to be ready if a disability strikes you unexpectedly. As a small business owner, it’s up to you to protect your income. The loss of your earnings could have devastating effects on you and any of your dependents. 

Get a Quote For Disability Insurance Today

Protect yourself and your business by getting a quote for disability insurance today. Bounc3 can help you find exactly the right insurance coverage you need at an affordable price. We can help you select the right length of your policy, the benefits you will get, and the premiums you’ll pay.