We have said this before: disabilities do not discriminate. They affect the young, the old, the rich, the poor, the executive, and the construction laborer. The same for tattoo artists as well. You love your job, right? Have you ever thought, if the paycheck you just received was the last one for a year, what would you do? How would you pay your bills? Seriously? And, if you own your Tattoo business, what would happen to it? Honestly, if you went without income protection, you probably would have to close it down. In this article, we discuss disability insurance for tattoo artists. We first discuss disability insurance basics followed by the available disability insurance plans for tattoo artists.
What Is Disability Insurance?
Let’s say you suddenly lose feeling in your right hand. Well, you need to use your hands to do your job, right? You go to the doctor. After a series of tests, the doctor diagnoses you with Fibromyalgia. She says you need to rest and that you must limit your work as a tattoo artist.
Here is another situation. You are stopped in your car at a stop light. The light turns green and you proceed normally. Suddenly, you are hit from the side by another car who ran his light (text messaging while driving). You are injured and will be out of work for an extended period of time.
Or, you felt sluggish and not yourself for several months. Your doctor runs tests. A visit to your oncologist indicates that you have leukemia and need to start treatment. You’ll be out of work.
What is common here?
These are all disabling situations. How will you pay your bills: mortgage, credit card, utilities – if you can’t work and earn a paycheck?
Enter disability insurance. Disability insurance pays a monthly benefit to you if you miss work due to a disabling injury or illness. The monthly benefit amount is usually a percentage of your income. Depending on the carrier, carriers like to average out your income over the previous 2 or 3 income years.
Notice, though, that these scenarios are not necessarily job related. It is true. Most disabling injuries and conditions are not job-related at all. In fact, the council for disability awareness states that most disabilities are from illnesses.
That means the likelihood of a disabling injury happening in your occupation is low.
Moreover, 1 out of 4 working adults experiences a long-term disability.
Finally, the average disability lasts between 2 and 3 years.
Disability Insurance Basics For Tattoo Artists
How do those stats make you feel? Worried? Concerned? They should. Luckily, disability insurance is available for tattoo artists. First, though, it is important that you understand some disability insurance basics.
Disability insurance is a bit different than other types of insurance. Disability insurance carriers are really looking at various aspects to insure tattoo artists. They look at your:
(4) anything else material to the approval decision
The process is known as disability insurance underwriting.
We discuss these aspects next. We then discuss the parameters of a disability insurance policy.
Why Your Occupation Matters?
Your occupation matters. An easy, comparative example. You would agree that a construction laborer has a higher likelihood of disability than an accountant working at a desk, right?
This is why your occupation matters.
Wait, John, you say. You just said that most disabilities are by illnesses. That isn’t necessarily job related. What gives?
Good question. While the statistics show that a majority of disabilities are from illnesses, people are disabled through their occupation. Back, wrist, arms, hands, and leg injuries are more prone in some occupations than others. We write about this more in our discussion about insuring your hands.
The tattoo artist occupation is no different.
Carriers rank or classify occupations from 1 to 5 or 6, with 1 being the most prone to occupation disability and 5 or 6 being the least. All things being equal, a person working in an occupation classified as a 1 pays a higher premium than a person in an occupation classified as a 5.
You may have realized that the tattoo artist occupation is a hard one to cover. Not many disability insurance carriers cover tattoo artists on the occupation alone. In fact, we work with only one carrier that does. They classify the tattoo artist occupation as a 1.
We discuss disability insurance options for tattoo artists more below.
Additionally, many carriers have a work requirement. They want to see you working in your job at least a year and working 30 hours / week or more. The 30 hours / week is considered “full-time”. Only one carrier we work with offers individual disability insurance to part-time employees (those working between 20 and 29 hours per week).
Why Your Income Matters?
Your income matters. If you are disabled, partially or totally, the carrier pays a percentage of your income. Some carriers look at your recent or current income. Others request your tax returns and average out the last 2 or 3 years. It really depends on your income, the carrier, and the underwriter (the person who reviews your application for approval).
Carriers pay a percentage of your income, usually between 60% and 70%. If you are a W-2 employee, they use your gross wages as your income. If you are self-employed, they use your net income off of your tax return. The distinction has importance.
Many carriers have a minimum income requirement. Most carriers require a minimum annual income of $10,000.
The higher the income you make, the higher your monthly benefit, and the higher your premium, all things being equal. Is this a bad thing? NO! Remember we are insuring your income in case you can’t work due to a disability.
You can always apply for a lower benefit amount. Why would you do that? If you do, and are disabled, you will receive a lower benefit than what you need. While some coverage is better than no coverage, you should strive for 100% coverage. There are many ways to afford disability insurance. You just have to determine what is important. Having protection for your family or not?
Why Your Health Matters?
Of course your health matters. We just mentioned that most disabilities are illnesses and sicknesses. A person who currently has type 2 diabetes will have to pay more for disability insurance versus someone who is healthy. Is that fair? Yes. Why? Because the person who has type 2 diabetes has a greater chance of a disability than someone who is healthy. Just a fact.
OK, John, I get that, you say. But, what happens if I am diagnosed with a health condition later?
You are covered, no problem. As long as the condition or injury is not pre-existing, disability insurance covers you for really anything.
And what if you are?
Every carrier is different, but likely they all will have an exclusion of coverage, limit your benefit, or a combination of both. Really depends on your situation.
This is why you want to cover yourself and protect your income with disability insurance while you are young. Younger ages have lower premiums. You pay this low premium for the rest of your working life. Moreover, you are healthy and should get through the underwriting process easily.
The moral of this section. If you don’t already have disability insurance, and your family will suffer financially upon your disability, you need it NOW.
The carriers consider anything else material to your chances of disability. Do you like to skydive? Smoke marijuana? Drink alcohol…too much?
All of these are lifestyle or hazardous choices that affect your disability insurance premiums.
Do you like to drive…really fast? And, have you been caught? Yup, those speeding tickets matter.
Remember, carriers are looking at your chances of disability. If you participate in hazardous activities or have lifestyle choices, that will affect your premiums, benefit, benefit periods, or a combination of all.
Carriers aren’t discriminatory here. To reiterate, they are determining your chances of disability.
That’s OK, John, you say. I just won’t tell them about it.
Well, you can certainly do that. Keep in mind that disability insurance is 24-hour coverage. What does this mean? Let’s say you smoke marijuana from time to time. You don’t disclose this on the disability insurance application. One day, you smoke too much, and you trip down the stairs. You break your back and tear your ACL. You can’t work. Will the carrier cover you?
You are better off disclosing any hazardous activities and lifestyle choices, paying a higher premium, and knowing you have peace of mind.
Disability Insurance Definition Basics For Tattoo Artists
Here are some disability insurance definitions tattoo artists need to understand.
Waiting Period – the time period before you are eligible for disability insurance benefits. You can have a waiting period as low as 30 days. This means once you submit a claim and approved, you must wait 30 days before becoming eligible for disability benefits. Once you are eligible, the carriers send your disability payments 30 days later. In effect, you receive your payment 60 days from the date of disability.
During the waiting period, you receive NO disability payments. You must balance the waiting period with your premium cost and your personal savings.
Benefit Period – this is how long you can receive disability benefits. A 5 year benefit period means you receive benefits for a maximum of 5 years.
Total Disability – a disability in which you can’t work 100% of the time and receive your total disability benefit
Partial Disability – a disability in which you can work partially (less than 100%). The carrier pays you a partial benefit based on the time lost due to the disability.
Definition of Disability – carriers base your disability payment on your disability definition. You really want own-occupation whenever possible. Why? An example will explain.
Why The Definition Of Disability Matters
We consider the plan’s definition of disability as the heartbeat of your plan. An example makes this clear.
Instead of a tattoo artist, you are a vocalist, full-time, as part of a symphony. You have a disability insurance policy that contains the own occupation definition. One day, you lose your voice and your doctor says you can never sing again. You receive a disability payment because your policy is based on your own occupation as a vocalist. You can’t sing!
What if your plan was not own occupation? Then, the carrier could assume, based on your education, skills, and experience that you could work in an office instead as a vocalist. In this case, you have the unfortunate any occupation definition. This definition is the social security definition. This is the main reason why social security declines so many people.
The own-occupation definition gives you much more flexibility and peace-of-mind. There are several variants of the own-occupation definition, which we won’t discuss here, but know that disability is based on your occupation as a tattoo artist.
How Can You Get Disabled?
Before we get into the types of disability insurance for tattoo artists, let’s talk about the different ways one can get disabled and not work.
(1) from an illness or condition like cancer or multiple sclerosis
(2) an injury on the job
(3) an injury off the job
(4) gradual wear and tear which may or may not relate to your occupation. For example, you develop carpal tunnel syndrome in your wrists. Or, you have a progressive, degenerative knee problem. Or, degenerative eye/sight loss.
A disability can occur from anything. Keep in mind, though, that the average long term, disability lasts around 2 to 3 years. So, throw those images of people in wheelchairs out of your mind. While a catastrophic disability does happen, thankfully the probability is low.
This is why disability insurance for tattoo artists is so important. There are, conceivably, an unlimited number of ways of disability.
Types Of Disability Insurance For Tattoo Artists
As we mentioned, the tattoo artist occupation itself is a hard one to insure. In other words, many disability insurance carriers won’t insure tattoo artists simply because you are a tattoo artist. You can be the healthiest person in the world, but you will still be declined due to your occupation.
Here’s why: traditional disability insurance coverage is 24-hour coverage. If you are injured on the job and can’t work, that’s a disability.
However, there is one carrier that will insure the tattoo artist occupation. The carrier classifies your occupation as a 1.
Additionally, we work with a disability insurance carrier that won’t consider your occupation as a tattoo artist. In other words, as we described in the underwriting section above, they will review everything but your occupation.
Sounds good? Well, it can be. However, let’s say you get hurt on the job or have job-related injuries/conditions like carpal tunnel or back issues. The plan won’t pay.
Nevertheless, some coverage is better than none. And, this plan will pay if you are diagnosed with a disabling illness (see above) or an injury outside of your job.
Additionally, there are accident-only disability plans. These plans pay only if you are disabled due to an accident, 24 hours. Since a majority of people don’t suffer a disability from an accident, you can expect premiums are low. Are these worth it? Can be. Remember, accidental injuries could lead to a disability.
Disability Insurance Coverage For Tattoo Artist Business Owners
Are you a business owner or self-employed? You have an advantage. You can enroll in a policy that will pay your business expenses upon a disability. The policy is called a business overhead expense policy. Premiums are tax deductible. If structured properly, benefits are income tax-free as well. This type of policy will ensure your business remains solvent during your inability to work from a disability. This is an additional reason why tattoo artists need disability insurance. Contrast this policy to a traditional disability insurance which pays a percentage of your income.
Additionally, we also work with a good carrier on the group insurance side. Remarkably, you could insure yourself and someone else in your company. Depending on the number of participants, you could apply at guaranteed issue (which means no medical underwriting)! Family members and spouses can apply, which is usually not the case with most small group insurance plans. Monthly benefits are up to $7,500 per month. This is another opportunity for tattoo artists to purchase disability insurance.
Alternative Types Of Disability Insurance Coverage For Tattoo Artists
There are other types of coverage which can replicate that of a disability insurance policy. Are they perfect? No. They aren’t disability insurance. They do not have the same coverage as a disability insurance policy for tattoo artists, but they can provide monetary support.
There are plans that can pay lump sum benefits in case you are in an accident with injury or diagnosed with a specific illness.
If you are in an accident or suffer a covered accidental injury, an accident insurance policy pays a fixed benefit based on the accident or a lump sum payout. You use the money any way you would like. You can use the money to pay for medical bills, utility bills, groceries, etc. The plans we like offer 24-hour coverage.
If you are diagnosed with cancer, heart problems, or any other covered disease or condition, a critical illness plan pays a similar way. Many plans pay a lump sum – say $100,000 – to you for whatever you want. Again, that can be mortgage payments, groceries, even a trip to Disney World if you want. Moreover, there are plans that pay a smaller monthly benefit, but help with monetary assistance through your treatment and recovery. The type you pick is up to you.
These plans are useful if you are declined for disability insurance. Moreover, you can carry these policies well beyond age 65, making them useful in case you need them in old age.
Additionally, there are sickness plans available to people. Underwriting is not as stringent, but they cover every occupation. These plans are short-term – only 6 month benefit period depending on the state you live in. Again, are they perfect, no? However, some coverage is better than none.
Tattoo artists can obtain disability insurance. This insurance is incredibly important. However, your occupation itself is a hard one to insure. Does that mean you go without? No! As I said, if you and your family will struggle financially upon your disability, you likely need disability insurance. And, if a carrier won’t approve you because of your occupation, then we have alternative ways to provide coverage. Some coverage is better than none.
Are you ready to discuss? Unlike other agencies, we aren’t the bothersome types that call you day and night. Contact us or use the form below. We will follow up with a phone call or email usually within 24 to 48 hours. In our conversation, we want to get to know you and your needs. Moreover, unlike many other agencies, we have duty of care to you. What does this mean? We put your interests first, not our own. This means if there is a better solution available that we can’t provide, we inform you of that solution and put you in touch.