As many self-employed women entrepreneurs can attest, running their own business is a balancing act. Between growing the company, managing finances, and keeping up with family responsibilities, juggling it all can be difficult, yet rewarding. Building something from the ground up that’s truly your own is only part of the story. It’s also important to recognize that your ability to work is what keeps it all running smoothly.
But what happens if an illness or injury takes you out of the picture, even for a little while?
Unlike employees at large companies who often have disability benefits built into their compensation, those who are self-employed, especially women, are more financially vulnerable when unexpected health issues arise. That’s why disability insurance isn’t just another expense. It’s a critical part of your financial strategy that helps ensure your business and income can continue, even if you can’t work.
The reality: women business owners face more financial risk.
Women-owned businesses are thriving, but women still face more career disruptions than men. Whether due to pregnancy, caregiving, or health issues, women who are self-employed often take more time away from work, which can lead to financial strain.
Did you know?
- As of 2024, even the top 10% of income earners in the U.S. didn’t feel financially secure. ¹
- Women are more likely than men to step away from work for caregiving or health reasons. ²
- One in four working Americans will experience a disability before retirement. ³
- Over 60% of bankruptcies in the U.S. are tied to medical expenses. ⁴
- 40% of Americans don’t have $1,000 in savings. ⁵
Disabilities can and do happen more often than you may think. And because your income as a business owner isn’t guaranteed like a corporate salary, an unexpected illness or injury could put everything you’ve built at risk. That’s why a financial strategy that includes disability insurance can make a big difference.
What is disability insurance, and why should you consider it?
Disability insurance is income protection—it replaces a portion of your earnings if you’re unable to work due to illness or injury. For women who are self-employed, disability insurance isn’t just about protecting personal income, it’s about keeping the business running while you recover. Some of the top reasons women entrepreneurs should consider disability insurance include:
- Your business and income depend on you
If you’re not working, who’s generating revenue? An illness or injury could mean a major income loss. Disability insurance helps replace lost income, so your financial stability doesn’t disappear overnight. - You can’t rely on savings alone
Many entrepreneurs assume savings will be enough. But could you afford six months or more without income? Disability insurance provides a steady cash flow without draining your savings. - It can help cover business expenses, too
Some policies offer overhead expense (OE) coverage, which helps pay for rent, employee salaries, utilities, and other operational costs. - Health issues are more common than you think
Most long-term disabilities are caused by illnesses like cancer, heart disease, or mental health conditions, not accidents.
Things to consider when choosing a disability insurance policy:
- Determine the right amount of coverage for your goals
Aim to replace 60–70% of your income. Since benefits are often income tax-free, this should cover essential expenses. - Short-term disability insurance vs. long-term disability insurance
Consider having both. Short-term disability insurance helps with temporary issues like pregnancy complications or surgery recovery, while long-term disability insurance protects in the event of serious, long-lasting conditions. - Overhead expense (OE) insurance
If you have fixed business costs, look for a policy that includes OE coverage to keep operations running. - The elimination period
This is how long you wait before benefits begin. Shorter periods mean quicker payments but usually higher premiums.
Protect yourself, protect your business, and help ensure financial well-being.
As a self-employed woman entrepreneur, you’ve worked hard to build your business and financial independence. Without disability insurance, one health issue could derail everything. Disability insurance isn’t just about protecting income, it’s about protecting your future, sustaining your business, and gaining financial confidence.
Now is the time to prioritize income protection and help ensure your financial well-being. Taking the time to set up disability insurance today could be one of the smartest financial decisions you make.
1 Guardian Life Insurance Company of America. (2024). Mind, Body, and Wallet® 2024. Retrieved from https://www.guardianlife.com/reports/mind-body-wallet
2 Federal Reserve Bank of Minneapolis. (2023). Who’s not working? Behind the full-time caregivers leaving the workforce. Retrieved from https://www.minneapolisfed.org/article/2023/whos-not-working-behind-the-full-time-caregivers-leaving-the-workforce
3 Guardian Life Insurance Company of America. (2024). Disability insurance for the self-employed. Retrieved from https://www.guardianlife.com/disability-insurance/self-employed-what-you-need-know
4 Himmelstein, D. U., Lawless, R. M., Thorne, D., Foohey, P., & Woolhandler, S. (2019). Medical bankruptcy: Still common despite the Affordable Care Act. American Journal of Public Health, 109(3), 431–433. Retrieved from https://pmc.ncbi.nlm.nih.gov/articles/PMC6366487/
5 Bankrate. (2023). 60% of Americans can’t cover a $1,000 emergency expense with savings. Retrieved from https://www.bankrate.com/banking/savings/emergency-savings-survey
