Many people think business owners live a comfortable life. They’re their own boss, right? Doesn’t that mean they can spend their time however they want? For highly established enterprises, yes, that could be the case. However, for small-to-medium-sized businesses, entrepreneurs invest significant work, time, and resources every day just to make their venture thrive and not fail like 70% of businesses do.
That’s why it’s saddening that life’s unpredictability and unforeseen circumstances sometimes result in the impairment of the body and mind, preventing business owners from managing their enterprises to their best ability. In some cases, an entrepreneur even loses their capacity to run their venture completely. Fortunately, there’s disability insurance—and all the potential benefit claims that come with it. Through this type of insurance, entrepreneurs can receive financial support should they be unable to perform their entrepreneurial duties.
The big question now is how disability claims work. What can business owners like you do to receive benefits when an injury or illness-related condition strikes? In this post, we’re going to shed light on that and more.
Understanding disability claims
Unless you’re working with a short-term or long term disability attorney, making the most out of your coverage involves doing your best to fully grasp its concept and the different claim types that may apply to you. Without a comprehensive understanding of your coverage, you might end up getting denied the benefits you rightfully deserve.
Here are the most crucial aspects of disability claims that every business owner must understand:
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Definition of disability claims
First, let’s define what disability claims are. It’s the process by which a policyholder seeks financial compensation after losing their ability to work partially or completely. It doesn’t matter whether it’s a physical or mental impairment that’s causing the disability; a qualified individual can receive support. For business owners who don’t have any other source of income other than their enterprise, a successful claim can be life-changing.
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Types of disability claims
Business owners eyeing income replacement through their disability insurance may qualify for either of these two major claim types:
- Accidental disabilities: Accidents are a common part of human experience. Unfortunately, the injuries that result from these mishaps can lead to significant financial loss among entrepreneurs.
- Illness-related disabilities: As the name suggests, this includes conditions caused by physical or mental problems. Like accidental injuries, acute and chronic illnesses can disrupt a business owner’s productivity and the enterprise’s overall stability.
When a disability arises, it’s best to consult a physician to verify whether the condition falls under accidental or illness-related disabilities.
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Coverage options
Next, business owners must also understand their policy’s coverage. These are the two most common coverage options:
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Individual disability insurance
Individual disability insurance is helpful for individuals who are self-employed, have employers who don’t provide disability coverage, or those whose existing coverage doesn’t sufficiently safeguard their income. It’s also a good choice for small business owners. solopreneurs, doctors. surgeons, dentists and other professionals who may not be covered under an employer plan.
In addition to financial assistance for stability, the individual coverage options provide a range of other benefits tailored to the insured’s specific needs and circumstances.
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Group disability insurance
This is a form of master policy and is perfect for business owners planning to include their staff in the coverage. One thing to consider about this option is that it’s more of a general approach to insurance, unlike the previously mentioned coverage.
Understanding the types of disability claims and the different coverage options can help business owners navigate the claim process better.
Qualifying for disability claims
Knowing how disability claims work and the specific coverage that comes with your insurance isn’t enough. With this limited knowledge, your claim might still get denied. That’s right—claiming insurance is far from straightforward.
So what do you need to do? Study the eligibility requirements. Explore the key factors below, which insurance companies look at during a claim evaluation.
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Eligibility criteria
To be eligible for disability claims, you may need to have been actively involved in your business tasks before an injury or illness occurred. For example, you may be required to show evidence of continuous work, like time sheets or project records, to verify that you were actively engaged in the operational aspects of your business before the onset of your injury or illness. But remember that these are only some of the possible requirements. It’s still a good idea to review what was outlined by your insurance provider. Or better yet, talk to a disability lawyer.
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Documentation and evidence
To increase your chances of approval, prepare the proper documentation that backs up your case. These pieces of evidence shouldn’t only include papers proving the existence of your business and your involvement in it. Present proof of your disability and its severity, such as medical records and laboratory test results.
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Disability definitions and limitations
Insurance appraisers also evaluate claims based on the disability definition and limitations within the policy. Disability in an insurance policy can be defined as the following:
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Own occupation disability
Disability insurance for business owners usually falls under this standard. Simply put, when you’re unable to perform your responsibilities or tasks in your business or occupation due to an injury or illness, you qualify for compensation.
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Any occupation disability
Stricter than the own occupation disability definition, it considers not only your capacity to perform your job as a business owner. The appraiser will also examine your education, skills, and work experience and then ensure that you’re unable to take a role in any gainful occupation despite being a suitable candidate before approving your claim.
Confused about how these disability definitions apply to you? If so, it’s best to talk to a disability attorney or advocate for clarification.
Conclusion
The life of a business owner is full of uncertainties. It doesn’t always go as planned. It also lacks the security that most nine-to-five jobs provide. That’s why many entrepreneurs get disability insurance to focus more on growing their venture, knowing they have something to fall back on for financial security in case they lose their capacity to work because of an injury or illness.
Getting a disability claim approved doesn’t always go smoothly, though. Receiving the benefit you’re entitled to requires sufficient knowledge and preparation.
