Opinion & Analysis
Why Small Business Owners Need Income Protection
14 Sep 2021
Let’s face it, as a business owner, you’ve got enough to worry about. The Bank of America Business Advantage Small Business Owner Report in 2017 revealed that running a business is four times more stressful than raising children — and that one in five business owners have had a nightmare about their business failing.
One of the best steps you can take to decrease the stress levels, is to have a plan in place for the unexpected. Income protection does just that; it’s a way of mitigating risk and having a safety net for when life throws you and your business a curveball.
Here are three reasons to get business income protection:
Your Bills Don’t Stop When You Do
Accidents can happen at any time and illnesses both mild and serious can materialise out of nowhere. How will you pay your bills if you need to take time off work for an extended period of time? Income Protection helps you do this by offering insurance for your income. There are specific steps small business owners can take when signing up for income protection insurance, such as having several years of proof of income at hand.
Beyond your own bills, you’ll also likely be responsible for the salaries of your employees and the costs of daily operations.
Income Protection Is Affordable
Long-term income protection insurance generally costs between one and three percent of your annual earnings. When you break this down into a weekly premium, it may just be the cost of one good business lunch a week. Yet the benefits, in terms of keeping your life on track should a challenge strike, are far-reaching.
It Allows You to Focus on Recovery
The key issue with income protection is that if you do become sick, injured, or find yourself dealing with a physical or digital challenge, getting back on track is that much easier when you’re able to pay all your bills during the recovery process. You can focus your time and energy on bouncing back from the challenge.
By protecting your income, you’ll be able to recuperate in the knowledge that operations will be able to continue and your own bills will be paid, even if you need to take some time out. It’ll give you peace of mind and help you grow a more resilient and adaptive business. Add in some of the value added support services that form part of income protection policies and where possible you’ll be able to get back to work in the best way for you.
This article is based on an original article published on the Council for Disability Awareness website and does not constitute financial advice. The Council for Disability Awareness is a nonprofit organization dedicated to educating the American public about the risk and consequences of experiencing an income-interrupting illness or injury. The CDA engages in research, communications, and educational activities that provide information and helpful resources to wage earners, employers, financial advisors, consultants, and others who are concerned about the personal and financial impact a disability, long term illness or accident can have on wage earners and their families. This does not constitute financial advice. IPTF thank CDA for their support in raising awareness of the importance of income protection.