Self-Employed Individuals: A Few Points About Insurance Coverage


By Sarando Matheos

What to Know About Business Interruption, Health, Disability and Critical Illness Insurance?

There are tax and other advantages to self-employment, but creating a safety net of insurance products for you and your family should also be considered. If you are self-employed, such insurance products can be lifesavers in your time of need. As a small business owner if you became disabled or critically ill for a long time, it would likely cause financially difficulty for you and your business. Disability and Business Interruption insurance for self-employed individuals can provide monthly income while critical illness insurance provides a lump sum benefit after a set period (usually called a waiting period).

In addition to the above, there are extended health insurance plans available to purchase that can help pay for medical and dental costs not covered by your provincial government health insurance (MSP). They can help provide protection against potentially costly, unforeseen health care expenses.

What is Self-Employed Disability Insurance?

It is advisable to contact an insurance broker to see what products suit your needs. When the “unexpected” happens and you’re unable to work, a self-employed disability policy will provide some income replacement, usually expressed as a percentage of your average monthly earnings. If you’re self-employed, you can buy self-employed disability insurance. The taxability on this income depends on how the premiums are paid or structured. If the premiums are paid through a professional corporation, the benefits may be taxable in your hands. If the premiums are paid personally, the benefit may not be taxable. It is important that you seek the advice of a broker and accountant on how best to set up the coverage.

What is Critical Illness Insurance Coverage?

One in four Canadians will suffer a critical illness by age 65, and the costs related to critical illness continue to rise. Critical illness insurance is designed to protect policyholders who become critically ill or injured. If you are self-employed, critical illness benefits can be crucial to your financial survival.

Such policies provide a lump-sum payout. The amount would be set out in the policy you purchased and based on your needs usually in consultation with an insurance broker. If your illness meets the criteria set out under the policy with no applicable exclusions, you should be entitled to the benefit.

What to Know if Your Claim is Denied

The insurance policy terms are contractual and subject to interpretation. That is why if your claim is denied by the insurance company in your time of need, consult a lawyer as soon as possible. Time limits are not the same for every policy and each circumstance is unique. Therefore, it is essential to get legal advice to know what time limits apply in your particular disability circumstance.

Read more: Five reasons why disability claims are often denied.

Self-employed disability claim cases are often denied for lack of medical evidence. Our disability claim lawyers have successfully resolved these denied claims by producing medical evidence required to prove the disability defined under the policy.

Need Help with Self-Employed Disability or Critical Illness Claim Denied?

If you, or a family member, have become disabled and critically ill, and your insurance claims are being denied, you need expert advice from experienced disability and critical illness lawyers for a fair and equitable resolution of your claim.

In addition to meeting the definitions for insurance coverage, there are time limits for all critical illness and disability insurance claims. Any delay in proceeding may be subject to a deadline. You should not hesitate in starting your claim or obtaining legal advice to clarify both definitions and deadlines.

 At McQuarrie, we have over 100 years of combined legal experience dedicated to litigating insurance claims, including denials of short- and long-term disability benefits, life insurance and critical illness claims. If your claim has been denied, contact us and our lawyers can offer guidance on your options and how to resolve your situation efficiently.

Have you been denied your insurance claim? Contact one of our experienced insurance denial lawyers today. We work on a contingency fee arrangement so there is no up-front cost to you, and you only pay a legal fee if the insurer pays you.

Contact us at 604.581.7001 for a free initial consultation.


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