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Disability Insurance For The Self-Employed: Best Providers Reviewed

At least 44 million Americans are self-employed, including freelancers, consultants, independent contractors, and gig workers. As a solopreneur, you’re responsible for finding health insurance coverage, often covering the entire cost. If you also have a disability or special healthcare need, it’s essential to have additional coverage for your needs. Here’s a shortcut list of our best disability health insurance options for self-employed people.

Why would the self-employed need disability insurance?

Health insurance can be a considerable expense if you’re self-employed. Without the assistance of a health insurance plan through an employer, you’re responsible for covering all costs on your own. However, having health insurance can save you future headaches and high medical costs in the event of unexpected medical expenses. Disability insurance, in particular, is separated into short and long-term policies. Short-term policies can last up to two years, while long-term policies can continue for several years or until your disability ends.

For self-employed individuals with a disability or special healthcare need, consider enrolling in a healthcare plan to offset the cost of routine medical expenses. Most plans cover yearly checkups, screenings, vaccines, and medications. Under the current healthcare law, plans must cover treatment for any preexisting conditions beginning on the first day of coverage. This means you won’t have to wait to receive your benefits once you’ve enrolled and are approved for coverage.

Best disability health insurance for the self-employed: shortlist

Here is a short list of some of the best disability insurance for self-employed options to consider

  1. Guardian — best for income replacement.
  2. Breeze — best for short-term waiting period.
  3. Mutual of Omaha — best for plan customization.
  4. State Farm — best for short-term disability benefits
  5. Assurity — best long-term disability benefits
  6. Kaiser Permanente — most affordable coverage

Best disability health insurance for the self-employed in 2024

As a self-employed worker with a disability, several options are available for choosing a health insurance plan. Some plans offer only short or long-term coverage, while others may offer both. Keep reading to learn about some of our best options for self-employed health insurance.

1. Guardian — best for income replacement

Guardian is a private insurance provider offering income replacement. This means if the policyholder passes away, their beneficiaries will still receive financial support through their policy.

Self-employed workers can join larger private insurance groups to receive savings and healthcare benefits. With many private insurance companies on the market, take the time to review each plan’s specific benefits and coverage to match your healthcare needs.

2. Breeze — best for short term waiting period

Breeze offers an easy application process online in addition to providing multiple options for waiting periods — how long you’ll have to wait before your benefits kick in. In as little as 30 days to one year, policyholders can access their benefits faster than other insurance policies

If you’re self-employed with no employees, you can buy health coverage for yourself (as well as family plans) through your state or the federal Marketplace. You can only enroll during the yearly Open Enrollment Period unless you have a qualifying life event. Through 2025, the Inflation Reduction Act is lowering costs for Marketplace plans.

3. Mutual of Omaha — best plan customization

Mutual of Omaha offers a Medicare Supplement, known as a Medigap, and ranks as one of the best supplemental insurance plans among policyholders. You can combine different insurance plans in addition to your Medigap coverage to fit your particular healthcare needs, and by doing so, lower your out-of-pocket costs for both yourself and your children.

Medicare is a government-sponsored health insurance program, mainly for adults 65 or older. If you’re younger than 65 with a disability or serious health condition, you may also be eligible to receive benefits through Medicare, depending if you meet any additional requirements (such as income and household size).

4. State Farm — best for short-term disability benefits

Short-term health insurance plans, also called term or temporary health insurance plans, offer fast, temporary health care protection for those who can’t secure affordable, ACA-compliant coverage. This could be because you can buy a short-term insurance plan throughout the year for coverage of up to 364 days.

StateFarm is one of the insurance companies on the market offering a short-term policy of up to three years — an average of one year longer than most other companies. Monthly benefits also range from $300 to $3000, depending on your current income and occupation.

5. Assurity — best long-term disability benefits

Assurity offers one of the most comprehensive benefits coverage as far as term length. Policyholders can choose benefits periods from one, two, five, or 10 years, and continue to renew their policy until retirement age. Assurity is also known for welcoming high-risk professionals and self-employed individuals.

Disability insurance for self-employed workers can ensure business owners will receive income even if their business isn’t earning them money for a set period of time. Long-term health insurance policies can provide some relief and peace of mind, especially if your injury or disability prolongs longer than you anticipated.

6. Kaiser Permanente — most affordable coverage

Kaiser Permanente offers the most affordable option for policyholders, which may be a significant factor when thinking about health insurance plans for spouses and dependents, like children or other family members.

If you’re married or in a domestic partnership, you might be able to join your partner’s employer-provided health insurance. However, not all employers offer health insurance to spouses. If you’re unable to receive employer-provided coverage, or if you’re both self-employed, you’ll have to enroll in a health insurance plan through the Affordable Care Act Marketplace.

How we picked the best disability insurance for self-employed

With so many options for disability insurance, we prioritized finding the most cohesive and beneficial insurance plans for self-employed workers. We feature insurance plans that focus on:

  • Wide variety of coverage. Take advantage of insurance plans that offer access to multiple types of benefits, such as hospital care, prescriptions, and lab work.
  • Affordable costs. We understand the importance of finding a disability insurance plan that fits within your budget.
  • Easy application process. Health insurance can be complicated enough, but applying for coverage should be simple and straightforward.
  • Availability and access to benefits. Offers terms that the self-employed appreciate, such as business expense riders and higher policy percentages.

What does it mean to be self-employed?

Being a self-employed worker means you work for yourself in some capacity. Unlike traditional employment, where you work for an employer, self-employed people often run their own businesses or pursue independent contractor work, such as freelancing. In terms of taxes, self-employed workers are responsible for paying their own estimated taxes (typically on a quarterly basis), and they are also responsible for finding their own health insurance plans for their business or solely for themselves without the help of employer-sponsored plans.

How much does disability health insurance cost for self-employed?

Health insurance premiums for self-employed workers depend on your age, where you live, tobacco use status, and health plan category. The premiums come at different prices, but the average benchmark premium for a 40-year-old in the Marketplace is about $465 monthly. The size of your deductible will determine a significant proportion of your out-of-pocket costs. Plans with lower deductibles usually have higher premiums. High-deductible or catastrophic plans cost less monthly, but you would have to pay more out-of-pocket for services and items before the insurance pays.

Employer-sponsored insurance under COBRA is typically the most expensive option for people who become self-employed after leaving a job. You might be responsible for paying up to 102% of your cost to the plan. Disability insurance may be available, and depending on your situation, you may be able to find low-cost or free coverage.

Short-term vs long-term disability insurance for the self-employed

The right insurance for you as a self-employed individual with a disability depends on your healthcare needs, eligibility, and budget. Having preexisting health conditions or a disability means you’re eligible to apply for disability-specific insurance plans offering you the right type of care you need. Keep in mind that government-sponsored health plans often have income limitations, and that can influence your approval status.

It’s important to know the difference between short and long-term disability insurance, as each can come with its own rules and guidelines:

  • Short-term. This type of policy may last up to two years. For many policyholders, coverage typically lasts anywhere from a few months to a year.
  • Long-term. This type of policy may last several years or until your disability ends.

Is disability insurance tax-deductible for self-employed?

Another factor to think about is tax deductions. Is disability insurance tax-deductible for self-employed? Yes, it can be. If you’re a business owner and you’re paying for disability insurance, either for yourself or for your employees, you can usually deduct the premiums as a business expense for your company. Be sure to consult a tax advisor to better understand what tax deductions are available to you.

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