disability-insurance-for-self-employedThe employment picture in the U.S. continues to evolve and change. Thankfully, the unemployment rate is going down and the number of new jobs added by employers is on the rise. Growing five times faster than the employer workforce is the full-time independent segment. Targeting the self-employed for disability protection products just might be your next growth market. Here’s why.

A perfect market for disability products

A recent study by MBO Partners, State of Independence in America, tells an interesting story about the current and predicted growth of this workforce. As of 2015, more than 17 million independent contractors and freelancers were working full-time. 63 percent of this workforce are Millennials (5.35 million) and Gen Xers (5.84 million), the prime age group for disability insurance. Over the next five years, even more full-time independents are expected. Another 29 million traditionally employed workers are considering a transition to independent status in the next 2 – 3 years. Another attractive aspect to this market is that 16 percent of these solopreneurs plan to add employees. More than half of today’s small businesses began as a one-person business.

There’s one more characteristic of the independent workforce to whet your appetite. Almost three million have annual incomes of $100,000 or more. The median income for high income earners is $192,000. Put it all together, you’ve got market size, growth trend, and income levels that support the wisdom of targeting full-time independents for income protection products.

The need for disability insurance

A full-time independent is just as susceptible to the possibility of disability yet does not have a corporate safety net to fall back on. Paid-time-off certainly isn’t an option. And unless an independent has wisely heeded the advice of a financial professional, chances are neither is disability insurance. In addition to their own financial vulnerability, a disability may also impact the finances of their clients if they are unable to or late delivering on a key project.

Disability specialty products

Its not surprising that carriers offer several specialty products for this market. Of course, individual disability insurance is the foundation. The self-employed may also need Business Overhead Expense (BOE) and Business Loan or Bank Loan DI.

BOE covers ongoing operating expenses like rent, utilities, interest on business debts, and more. Download What Expenses are Covered by BOE and check out another article about BOE.

Business Loan DI provides peace of mind to someone who needs a business loan. Especially when there is only one source of revenue to make loan payments. If the business owner becomes disabled, not only is their personal income impacted, but so is their ability to repay the loan. Watch this short video for more about Business Loan DI.

Finding qualified prospects

Some of the highest growth industries have the largest amount of independents. You’ll want to prospect for the higher earning independents. Get started by targeting technology, healthcare, biosciences, and finance industries. You are most likely to find high-earners in these sectors. Look for freelancers working as an independent for at least seven years. Indication of a stable, well-established business will also be helpful when applying for coverage.

Most communities have networking events for independents. A quick web search will help you find active networks in your community. Employers are increasingly using independent contractors on a project basis. Tap your local employer contacts for referrals and introductions.

The full-time independent worker market is a perfect match for individual and specialty DI products. DIS offers many product options and educational resources for producers and clients explaining the importance of disability insurance for business owners. Ask your DIS representative for other ideas about serving this growing market.

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