As a business owner, you cherish parts of the freedom of being your own boss. You call the shots and shape your vision. But this autonomy means you’re also responsible for protecting your financial future alone. Without employer benefits, an illness or injury could derail your income and goals. If you really think about it, none of the financial goals you envision for yourself are likely possible without your income. Whether it’s buying your first home, giving charity, contributing towards children’s weddings, retirement in Jerusalem with the grandkids (or a move sooner!), all of these things are built upon the assumption of your income. A tailored insurance toolkit—long-term disability, health, and perhaps whole life insurance for additional savings—keeps you in control, safeguarding your business and dreams.

Long-Term Disability Insurance: Protecting Your Income

Your income is your lifeline, and long-term disability (LTD) insurance shields it. If an injury or illness stops you from working, LTD replaces 50-70% of earnings, covering bills or business costs. Portable and customizable, policies offer “own occupation” coverage, paying if you can’t do your specific job, even if you can do something else.

Health Insurance: Coverage For You and Your Team

Health insurance is crucial, whether you’re solo or have employees. If you’re on your own, your options are your state marketplace or a business owner union plan (something I assist with). If you have employees, your options are much wider and a large range of medical plans are available for you and your employees.

Whole Life Insurance:
A Savings Safety Net

Self-employed individuals generally are attuned to maximizing tax-advantaged savings vehicles. Whole life insurance doubles as a death benefit and savings tool, similar to a Roth IRA in tax treatment. Its cash value grows steadily, insulated from market volatility, offering a financial hedge. You can borrow or withdraw funds tax-free for business or personal needs, when structured properly. Many utilize the cash value of these policies as a source of supplemental retirement savings to eventually spend down.

Business Partners and Buy-Sell Agreements

If you have business partners, hopefully you set up a buy-sell agreement when you set out together. This lays out what happens to a partner’s interest should a range of circumstances occur to a partner- death, disability, etc. Unfortunately, 99% of the time, our office’s staff attorneys find that these agreements (we offer a complimentary review) are missing crucial funding mechanisms. If your business partner passed away and you needed to buy out your late partner’s inherited spousal shares, where exactly would $500,000 come from, for example? Integrating buy-sell agreements with life and disability insurance makes these agreements actually financially feasible, where an insurance company steps in to cover the buy-out cost should the situation occur.

Why It Matters for the Self-Employed

Your freedom comes with risks. A disability or health crisis could halt your business or drain savings. LTD replaces lost income, health insurance curbs medical costs, and whole life preserves wealth through market dips, with tax-advantaged treatment. Insurance-funded buy-sell agreements strengthen your co-owned business even in a time of potential crisis. This toolkit ensures your business endures, letting you focus on growth, not recovery.

Building Your Toolkit: Next Steps

Tally expenses and goals to assess needs. Customize LTD for adequate income replacement. Compare health plans—union or group—to fit your budget. Allocate funds for whole life to balance savings and liquidity. Coordinate with emergency funds and review annually.

The Cost of Going Uninsured

Skipping insurance risks everything. A disability could cost millions in lost earnings—a $100,000 earner disabled at 35 might lose $2.5 million by retirement. Medical bills average $20,000 per hospital stay. Market dips could erode savings without whole life’s stability.

Steering Toward Security

Your insurance toolkit—LTD, health, and whole life—empowers you to protect your income, health, and wealth. You’ve got this!

Jamie “Elisheva” Kopelman is a disability, life and health insurance broker with National Financial Network, based in New York with her family. Contact her at [email protected].