Recommendations for disability insurance--freelance edition
October 31, 2016 2:49 PM   Subscribe

Disability insurance for freelancers: Worth it? Who does it well? The last question on this topic was from 2009, so I'm hoping for some more current info as well as (hopefully) recommendations!

It's been a long crap year full of un- and underemployment, watching friends and relatives struggle with life-altering illnesses and injuries. And all of this has got me looking for ways to shore up my sad little freelance career against what seems like an inevitable tidal wave of bullshit.

I'm self-employed but with no employees, in my mid-30s, no significant health issues or history, looking to protect an income that averages out to ~50K annually (but with quite a lot of month-to-month, year-to-year variation). From comparing plans online, it looks like I can expect to pay ~20-25 per month for coverage, but I have no idea whether those are good plans or bad ones or what.

So my questions are:
-Does that price range seem correct?
-Are there companies or plans you would recommend?
-Is this the sort of thing I should try to "bundle" with some other insurance? (health? renters'?)
-Is this a dumb idea born of stress and uncertainty?

Thanks, Mefites!
posted by We put our faith in Blast Hardcheese to Work & Money (3 answers total) 3 users marked this as a favorite
This website has lots of information about disability insurance not to get. Basically, don't go with UNUM. As you will be paying for the disability insurance yourself, you will not be covered under ERISA, which is very good and gives you many rights that people whose employers pay for their insurance don't get.

Disability insurance saved me from the poorhouse. I highly recommend it.
posted by djinn dandy at 5:06 PM on October 31, 2016 [2 favorites]

I have experience with (1) self-employment, (2) disability, but not (3) insurance.

I would beware of coverage that wants you completely physically shattered for it to kick in. Consider conditions that could extremely limit but not completely kick off your ability to work. Are you still covered if you can work an hour a day? "Disability" is a very nebulous term. Do set aside savings for "I am unwell" through to "diagnosis: unwell." There's a lot of that in the "tidal wave of bullshit." I would spend extra for something that only required my own GP to tick a box rather than something that sent me through hoops proving ill health. (For example: where I am, I would qualify for some help if I was not able to complete 'tasks of everyday living' -- this means, for example, that you need somebody to come in and bathe you. If your elbows have given up the elbowing task to the point where you can wash and brush your hair, but it takes a long time and extra painkillers -- you are not sufficiently 'disabled,' even if it comes down to: be clean or work?)

I would also be wary of coverage that only deals with short-term disability.

And, in retrospect, yes, I would definitely get the insurance. It is not a dumb idea -- it's totally realistic. (Writing from the poorhouse, here!) Good short-term coverage is actually also important too -- I had surgery this month and the expenses associated with it are terrible, and you end up with problems for being out of commission for a bit -- I now have to shop around for new car insurance because a credit card expired and I didn't go to the mailbox and got cut off; long story, very stupid, will not go back with "Aviva" -- after credit-carding $$$ for uncovered medications, easy-to-grab food that my stomach actually wants to deal with, extra laundry, and, if I didn't have friends and family, a LOT of home help/errand-running -- ouch, literally and financially. Just six weeks is enough to really cripple you money-wise if you are crippled; what looks like a good wad in savings or a credit card buffer ends up inadequate when your expenses shoot through the roof, and they do that when you are unwell.

Would also suggest making all efforts to live under your means and saving as much as you can; that has been the difference between Bad and Disaster here.
posted by kmennie at 7:15 PM on October 31, 2016

Other specific information:

You want an "own occupation" policy; that is, one that says that you are disabled if you are unable to perform your own job,. The other choice is a policy where you are considered disabled if you cannot perform your own job for two years, and then any job after that.
posted by djinn dandy at 7:31 PM on October 31, 2016

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