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What would happen to your business and your family if you suddenly had to take six months off because of a serious illness or injury?
To prepare for such situations, owner-operators can choose from two, and sometimes three, basic types of income replacement insurance: disability, occupational accident and workers’ compensation. Their costs and coverage vary widely. The main factors are how long you can wait to receive benefits, how large the benefits are, and how long you continue to receive benefits. Personal factors, too, will influence the premium – income, age, health status, bad habits, gender, leased or independent status, and type of loads you haul.
Ted Krzycki, a dry-van owner-operator leased to Crete Carriers, has been glad to have the short-term disability insurance that his company offers. Krzycki had an accident while trimming trees and broke his left hand. “I didn’t think a hand could give you so much trouble,” he says. “Last June I had a stint put in an artery in my heart, and I wasn’t even out for a month, but this broken hand has been giving me a fit.”
By paying a monthly premium of about $20, Krzycki, 60, was eligible to receive the maximum benefits of $500 a week for up to six months following a 30-day “elimination period” – the waiting period before benefits begin.
“Since I wasn’t out for more than a month in June with the heart thing, I didn’t receive any money, and it put me behind by a good couple of months,” Krzycki says.
Even though Krzycki, who has been an owner-operator for 16 years, was prepared with savings accounts, he says the disability coverage definitely helps out. “I never thought I would fall off a ladder,” he says.
Most insurance plans replace 50 percent to 70 percent of your income. Payout periods are as short as six months and as long as the rest of your life.
Maximum weekly payouts are typically $400 to $600, with elimination periods ranging from seven days to one year.
Social Security’s elimination period is six months, and that’s only for those deemed eligible for benefits. Social Security denies about half of the claims submitted, in part due to its strict definition of disability. To qualify, you must be unable to work at any job, and your disability must be expected to last a year or end in your death.
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