I think you’ll agree with me that massage therapists probably don’t think about disability insurance.
But, they should.
Why? Well, your work is hands on…literally. You truly make a difference in your client’s lives. Moreover, you particularly enjoy how you help your customers feel better, de-stress, or recover from chronic pain! You rely on your skilled knowledge as well as your physical ability to get the job done.
What if you could no longer do that job? Have you ever thought about what would happen if you became sick, ill, injured, and disabled? How would you pay the bills if you could not work?
- Why you need disability insurance?
- Types of disability insurance
- Understand disability insurance underwriting
- Makings of a strong policy for massage therapists
- Best disability insurance
- Estimated costs of disability insurance
- Now you know why you need disability insurance
Let’s jump in and discuss why you need disability insurance.
Why Massage Therapists Need Disability Insurance?
I get it.
You don’t think about disability insurance. Life is too busy.
You won’t get sick or hurt, either. That happens to someone else, right? (More on that in a minute.)
Your clients are very important, too. You need to focus on them, keep them happy, grow your business, and make money.
However, there is a group of people who are more important. Who can be more important than my customers, you think. They pay my income.
True. They do, but they don’t love you as your family loves you. By far, if you have a family, your spouse and children rely on you more than you think. They love you more than anything.
In other words:
If you and your family will struggle to pay the bills (e.g. your mortgage, groceries, healthcare, electricity, etc.) if you get sick or hurt and can’t work, then you need disability insurance.
It doesn’t get much clearer than that. If you need more reasons, see our article on the 5 reasons you need disability insurance.
Get Ready To Make Some Tough Decisions
Let’s level-set. Disability insurance pays a benefit if you can’t do your job due to an illness or injury.
Simple, really. You are sick or injured and can’t work, then you receive a benefit. This benefit helps pay your bills as you recover or go through treatments.
As I like to say, it is your “Plan B”.
And, if you don’t have any or want any? Then, you’ll have to answer some tough questions.
- Would you and your family be able to continue your standard of living without your income?
- If not, what changes would need to be made?
- Would your spouse have to work or work more?
- Would you need to sell your home to make ends meet? Who could be flexible with the children?
- Would you have the money to hire someone to take care of the kids?
The tough questions can go on and on.
Disability is known as the destroyer of dreams. Your future and family dreams could be destroyed. They don’t have to, though. With disability insurance, you have peace of mind knowing that you have a plan – and income – in place should the unexpected happen.
Yes, But A Disability Won’t Happen To Me
You think it won’t. However, the probability of having a long-term disability is anywhere between 1 in 3 and 1 in 4 workers. Contrast this to unexpected death, say from a motor vehicle accident, which is 1 in 114. Even dying from cancer has better odds: 1 in 7.
But, John, I’m not going to get hurt or be in a wheelchair, you say. Wow! I respond. If you know that, then you should not be a massage therapist. If you can see your future, you need to play the lottery! You won’t have to worry about income at all!
In all seriousness, when we think of disability, we think of someone bound in a wheelchair, right? Not true and far from it.
According to the Council For Disability Awareness, 90% of disabilities are from illnesses (like cancer) than from accidents. That means an illness or condition, such as cancer or a heart condition, has a higher probability of disabling you than a skiing accident.
Moreover, many massage therapists develop hand, wrist, arm, back, or shoulder problems over time. These chronic musculoskeletal issues are disabilities!
Ok, John, but I have workers compensation. I don’t need to worry about money. That’s great, I say. Did you know that 5% of disabling conditions are work-related, leaving the other 95% not covered by workers compensation? That makes sense since 90% of disabilities are from illnesses.
Again, what is your income plan if you can’t work?
The Types Of Disability Insurance For Massage Therapists
Now that I have your attention, there are 4 types of disability insurance available to massage therapists:
- short-term disability insurance
- long-term disability insurance
- business overhead disability insurance
- accident-only disability insurance
Many people ask us about the difference between short-term disability insurance and long-term disability insurance. Here’s the difference.
Short-term is really designed for a disability of a short time period. Let’s say you break your hand. Well, it’ll be hard to work as a massage therapist with a broken hand, right? So, that is a disability – you can’t do your job as a massage therapist. How long does a broken hand heal? Two to 3 weeks? Once you’ve met the waiting period, you’ll be eligible for benefits and receive some disability benefits.
Long-term becomes the life-saver on those disabilities that last longer than 3 months. Cancer… a catastrophic injury…ALS…Diabetes…you name it. Most families can get by financially when one member has a short-term disability. Sure, it might be tough, but families can get by. It’s a long-term disability that can financially ruin families.
Both insurances generally use the own-occupation definition of disability. (More on that in a minute.)
Two Additional Insurances
Business overhead disability insurance insures your business expenses. So, if you are a self-employed massage therapist, then you can insure your rent, licenses, taxes, etc. This type of insurance is ideal and premiums tax-deductible as well.
Finally, there is accident-only disability insurance. Think of this as a “last resort” disability insurance. It will only pay a benefit if you are disabled due to an accident. The better carriers offer coverage for both on and off-the-job injuries. Usually, there are no health questions. Most accident-only disability insurance is affordable. The reason is that most disabilities are not caused by accidents.
In this article, we focus on long-term disability insurance. However, you can contact us for any questions about short-term disability, business overhead, or accident-only disability insurance
Short-Term Disability Insurance For Massage Therapists
We receive many inquiries from massage therapists wanting short-term disability insurance coverage.
Honestly, you don’t need it. That might shock you. However, those who say you do, you should question their intention. We feel that short-term disability insurance isn’t worth the money.
What, you ask? Why do you say that?
Short-Term Disability Insurance Can Be A Waste Of Money
You will never hear this from most agents. But, I am not like most agents.
Short-term disability insurance can be a waste of money. I mean a lot. Just look at this real quote for a Massage Therapist. This quote is based on a $30,000 net income. Are you ready to spend $100 to $200 per month on short-term disability insurance? There’s a reason it costs so much. There are a lot more short-term claims. Spending a couple hundred a month on short-term disability insurance is common. I am talking about individual coverage. Policies through your employer, if you are an employee and offered, likely cost a lot less. Those can make more sense, but not individual coverage.
Second, short-term disability insurance covers disabilities of a short-term, maybe a couple of weeks to a couple of months. Then, you are done.
A Better Option
However, there’s another favorable option that covers massage therapists. Do you know what that is?
If you said, emergency savings, you are right.
Saving a few months of expenses proves advantageous. Do you see why? You won’t spend needlessly on short-term disability insurance. You already have the money for your short-term needs. It’s more important to have long-term disability insurance as those long-term disability situations place more financial pressure on families.
What about pregnancy? We described in our article that you could spend more on premiums than receive as a benefit. Yet, these other agents won’t discuss that or these alternatives. They’ll confirm you need it because you think you need it.
If you want some insurance for childbirth, pregnancy, or maternity leave, we discuss affordable options as well. We have helped many massage therapists obtain pregnancy or maternity leave insurance.
If you can obtain short-term disability insurance through your employer, then it could make financial sense. However, having an emergency fund for these short-term situations is the right solution.
Disability Insurance Underwriting For Massage Therapists
Hopefully, we have made a great case for disability insurance. Not only is your livelihood at stake, but also your family’s.
After you submit the application, your application goes right to the underwriting department. The underwriting department reviews your application and approves the premium and coverage.
Disability insurance underwriting can be more involved than, say, life insurance underwriting. For disability insurance, there are 4 key areas for premiums and approval:
- Health Conditions
Your age and income are straightforward. The older you are, the more expensive the policy will be. The higher your income, the higher the benefit, and the higher the premium. Don’t worry about the actual premium. I’ll discuss that more when we talk about premiums below, and how we are different than other agencies.
In case you were not aware, your income is your W-2 gross salary if you are an employee and your net income if you are self-employed. So, if your W-2 salary is $60,000, that is the number used for underwriting. Net income is off your schedule C on your tax return. If you are self-employed, your net income is the number carriers insure. It is your gross sales less business expenses. Without getting into the weeds, your net income as a self-employed massage therapist is essentially the same as a W-2 employee gross salary. (Related: see our article on using the right income for disability insurance.)
Carriers like to look at the last 2 years or 3 years and average out. So, having the last 2 or 3 years of salary on hand is handy for the application process.
Your occupation is straightforward, but we will discuss this in further detail next.
First, let’s talk about health conditions next.
Health Conditions Matter With Disability Insurance Underwriting
Underwriting of health conditions is a tad different compared to life insurance underwriting. Remember, the carrier is insuring your potential disability (not chance of death, as with life insurance). So, disability insurance underwriters look at your previous and current health conditions much differently.
Essentially, any previous or current health conditions are pre-existing and won’t be covered. In other words, the carrier excludes coverage.
Of course, there are exceptions.
For example, a low-maintenance health condition, such as hypertension or cholesterol, will likely be covered as long as there are no additional complications.
Previous injuries are usually covered as long as there are no pins, rods, or other structures supporting the injured body part.
However, anxiety and depression, even if under a low-maintenance regimen, are usually excluded from coverage.
Same with going to a chiropractor for “maintenance” on your back. A chiropractor is a Doctor. If you go to one, underwriters see that as an existing problem. So, they exclude coverage on your back and spine. Note: we have been able to secure disability coverage, including back and spine coverage, for professionals who do go a chiropractor. It’s a case-by-case basis and important to contact us so we can discuss your situation.
If you have more serious health conditions, the carrier could place a rating on your policy. A rating is an extra premium the carrier charges for an increased disability risk. Moreover, the carrier may limit options such as limited waiting periods or reduced benefit periods.
Having an exclusion or a rating is not a reason to ignore a disability insurance policy. There are nearly endless ways for a disability to occur.
Your Occupation Matters, Too!
Many massage therapists ask us how their occupation matters with disability insurance underwriting. Well, some occupations are riskier than others. Carriers adjust for this.
All the disability insurance carriers classify occupations. In general, the carriers classify from 1 or A to a 5 or 6. An occupation with a class 6 has the lowest disability risk due to occupation and a class 1 occupation has the highest.
All things being equal, you’ll pay a higher premium if you are a class 1.
Well, you do have the potential for a higher on-the-job disability compared to, say, an office manager. Carriers underwrite this by assigning your occupation a classification number.
While there is general alignment among the disability insurance carriers, some carriers elevate your classification higher. All things being equal, carriers with a higher occupation classification save you money with lower monthly premiums. While not guaranteed due to specific provisions, we have helped many self-employed massage therapists attain a class 5, thereby saving significant premium money.
The Makings of A Strong Disability Insurance Policy For Massage Therapists
Let me tell you something that other agents won’t: disability insurance isn’t complicated. Moreover, you don’t (likely) need all the “bells and whistles”.
This is what I mean. Disability insurance can be tailored to your needs. However, we feel there are some “non-negotiable” provisions that you need in your policy. After that, your preference determines other options and riders.
The first “non-negotiable” is the own-occupation definition of disability.
Luckily, many carriers make this definition of disability available for massage therapists.
The own-occupation definition means that the carriers pay a disability benefit if you can’t perform your own occupation as a massage therapist. It pays even if your disability doesn’t prevent you from working in another job, say as a security guard.
The second feature is partial disability benefits. You’ll want this. All this means is that the carriers pay you a partial benefit if you can work, but just not full-time. Many carriers offer this, but they have a stringent definition. We work with carriers that offer an easier definition massage therapists.
Finally, guaranteed purchase options are a key feature of a policy. This option gives you the ability to purchase more disability insurance in the future, but with no underwriting required. You just need to show financial insurability.
For example, 3 years ago, you made $30,000 and bought disability insurance. Today, you are making $60,000. That is a $30,000 increase! You can insure that amount through the guaranteed purchase option. Without that option, you would have to prove health insurability. Who wants to do that?
In our opinion, these three features are key to disability insurance for massage therapists. After that, you can choose features and options at your preference. We discuss those next.
Disability Insurance Basics For Massage Therapists
There are several definitions and provisions you’ll need to understand about disability insurance to make an informed decision.
There is an elimination period, or waiting period, which is like a deductible. It is the length of time that elapses before disability benefits begin. For example, if you select a 90 day elimination period and are disabled, you’ll be eligible for disability benefits on the 91st day. However, typically with carriers, you won’t get paid until 30 days later or day 120 or so. This means you need to have adequate savings to carry you and your family until benefits begin.
For long-term disability insurance, you can go as low as 30 days for a waiting period.
Disability benefits can be paid for as long as 5 years and with some carriers to age 67. It’s important to note that this is based on claim. As long as you pay premiums, you will have disability insurance (unless you have a conditionally renewable plan, and those do exist).
Although other websites state otherwise, most carrier claim departments will tell you the average long-term claim is 15 months. That means a 5 year benefit period, for example, might work well for you.
You might be wondering why we are telling you this. The reason is all of this leads to premiums. The lower the waiting period, the higher the premium you’ll pay. The longer the benefit period, the higher the premium you’ll pay. And, vice-versa. All things being equal, of course.
You will have to make decisions based on benefits versus cost. Everyone wants the “Ashton Martin” plan. However, nearly everyone can’t afford that. Additionally, the old adage runs true here: some coverage is better than none.
Some coverage is better than none!
Optional Disability Insurance Riders
You can add optional riders at an additional cost to your policy that best fits your needs and budget. Some popular rider options for massage therapists include:
Return of Premium Rider: You get your premium money back if you never submit a disability claim. This can be expensive, and you may have other savings opportunities elsewhere.
Retroactive Injury Benefit Rider: Pays benefits from the date of disability due to injury (i.e. not sickness) if disability occurs within 30 days of the injury and continues through the elimination period.
Activities of Daily Living Rider: This rider pays an additional benefit if you can’t perform two or more of the activities of daily living or cognitive impairment.
Residual Disability Rider: This rider will pay a benefit if you return to work in your occupation, and you experience an income loss of 20% or more compared to your pre-disability income. Usually, the amount of disability income you receive is a percentage of your total monthly disability benefit. For example, let’s say you return to work and experience a 40% income loss. If your monthly disability benefit is $4,000, you will receive $1,600 ($4,000 X 40%).
Cost-of-Living Adjustment: increases your benefit by the inflation rate if you have been a year on claim.
Depending on the carrier, there are additional options such as a critical illness rider, non-cancellable provision, accident rider, and more.
The Best Disability Insurance For Massage Therapists
You are probably wondering who we like to work with. I mean, we did say “the best” in our title.
Well, because of advertising guidelines and remain compliant, we can’t disclose carriers in our articles any longer.
However, keep the following in mind:
- the “best” for you may not be for someone else. Everyone’s situation is different
- we have helped many massage therapists obtain disability insurance, so we know which carriers are favorable for your occupation and who are not
- depending on your state you reside in and other factors, you can have a class 5 occupation which is unheard of for massage therapists
- we routinely get our massage therapy client’s premiums below $100 per month (more on that below)
We have the expertise to guide you to the right disability insurance decision. Moreover, we have even helped massage therapists, who were declined for disability insurance before, get the coverage they need.
If we can’t help you, or if there is a better option for you, we will tell you that. You see, helping you is our first priority. Your interests come first to us, not our own needs and interest.
The Disability Insurance Program Through The AMTA
The American Massage Therapist Association (AMTA), and some of the other massage therapy associations, offers disability insurance to their members. The Hartford underwrites the disability insurance for the AMTA.
Association disability insurance programs tend to be “plain vanilla”, which means they are simple and basic in nature and may not meet your specific needs. However, because of the simplicity, they tend to be lower in cost as well.
In our opinion, the disability insurance program through the AMTA is no different. There are benefits and drawbacks. Here they are as we see them.
- very low monthly cost
- easy application
- non-medical underwriting at underwriter’s discretion
- spousal coverage, even if he or she is a non-AMTA member
- pre-existing condition coverage after a 12 month waiting period
While these are positives, the plan contains many drawbacks which we discuss next.
Disadvantages of the AMTA Disability Insurance Plan
• limited monthly benefit – the most you can receive is $4,000 per month. This amount equates to $68,000 annually. If you earn more than this, you’ll have a potential income replacement gap. For example, let’s say you earn $100,000 as a massage therapist. That means your maximum income replacement is about $5,800 per month. If you have the AMTA disability insurance for $4,000 and go on a disability claim, how will you come up with the additional $1,800 per month? Will you have to take an early, penalty distribution from your retirement account?
• limited coverage for sicknesses – if you have a disabling sickness or illness, benefits are paid for only 12 months. Remember, most disabilities are from sicknesses rather than injuries. That is concerning to us.
• modified own occupation definition for 2 years – they contain a modified own-occupation definition for 24 months. After that, if you are still disabled, The Hartford determines if you can do any job based on your education and experience. If so, you won’t receive a benefit.
• no residual disability benefit – a majority of disabilities start out as a partial disability. You suddenly have trouble with your wrist or your back, and your doctor limits you to working 2 days per week instead of 5. This is partial disability. You can still work, but not full-time. Cancer, Multiple Sclerosis, arthritis…you name it, can start out with a partial disability. Under the AMTA plan, the policy won’t pay. Why? It will only pay a partial benefit once you are totally disabled (i.e not working at all) and meet your elimination period. But, you are working and your doctor says you can work…see the problem?
A residual disability benefit will pay without the total disability requirement. You generally need a certain loss of income, loss of work time, or a combination of both.
While there benefits, there are drawbacks. We feel the drawbacks outweigh the benefits. However, you have to do what you feel is right for your situation.
How Much Do Massage Therapists Pay For Disability Insurance?
Everyone wants to know about costs. John, just cut to the chase. How much will all this cost?
Well, it depends.
Remember, disability premiums are based on the following:
- health conditions
You can’t change your age, and you can’t change your occupation. You can’t change your health conditions…to a point. Many exclusions can be reversed, depending on the situation. Your income is your income, and you want to insure as much as you can.
There are factors outside one’s control. However, we at My Family Life Insurance aim to keep premiums at $100 or less per month for disability insurance. Nearly all the time, we accomplish that. You can easily customize a policy for $100 per month.
Stated another way, disability insurance can easily cost anywhere from $1.00 to $3.00 per day. Maybe more, as we mentioned. Do you think that is expensive? If you buy coffee every day or your lunch, you are spending your disability insurance premiums anyway. That’s right. The cost is equivalent to the cost of a cup of Starbucks coffee.
Another way to look at the cost:
Disability insurance costs 2 cents for every $1 you make. Think about that.
There is no excuse to protect your family and livelihood. As we mentioned, some coverage is better than none. Don’t let cost be the deterrent for a solid policy protecting your family. (Related: See disability insurance mistakes people make.)
Now You Know Massage Therapists Can Obtain Disability Insurance
We hope now you have a solid idea why massage therapists need disability insurance. Confused? Don’t feel that way. We’re here to help educate you and protect your income and future.
Don’t know where to start? Use this disability insurance needs analysis worksheet. Follow the instructions; it is rather easy to fill out (we at My Family Life Insurance try to make understanding insurance easy).
Next, feel free to reach out to us for our assistance or use the form below. We only work for you, your family, and your best interests only. We have helped many massage therapists secure the right disability insurance for their specific situation, giving them and their families peace of mind.