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Disability Insurance for Childcare Providers

If you’re a childcare provider, it shouldn’t come as any surprise that your profession carries the potential to be injured or become disabled.  Picking up small children and being so active in your day to day activities can create aches and pains that may eventually put you out of work for a time. Disability insurance for childcare providers protects your income if you’re unable to do your job due to sickness or injury.  If your livelihood depends on the money that you make from caring for children, then read on to find out what to look for in your coverage.

What to Expect-Disability Insurance for Childcare Providers

Most professions need some form of income protection.  Not being able to work for months or even years would put most families in America in a precarious financial situation.  Childcare providers are no different.

Disability insurance for childcare providers supplies you with a monthly income if you’re unable to do your job because of an accident, injury or illness.

The average childcare provider is a 36-year-old female who makes about $15,400 annually.

Disability insurance for childcare providers and workers is priced according to your gender, age, and health.

This is both good and bad news for the childcare industry as a whole.

The bad news is that women tend to pay more for disability insurance than men, the reason being that women tend to make more claims than men.  Since childcare workers tend to be women (almost 92% are), this point is very relevant to your industry. There are ways around this fact that will be discussed later in this article but for the most part, as a woman, expect to pay more for disability insurance than your male counterparts.

The good news is that age also has a substantial impact on the cost of your policy.  Since the average childcare provider is under the age of 40, these policies tend to be less expensive than those professions that have an older demographic (such as insurance agents).

Health is personal so each person will be different.  What’s important is that you have a policy in place prior to developing that lumbar spine issue. Once you have a pre-existing condition, a new individual disability insurance policy will be unlikely to cover it.

What to Look For

As mentioned earlier, childcare workers need disability insurance as much as those in any other career.  It is especially important in jobs where mobility is important.

For childcare providers, becoming sick or injured and unable to do your job can be very challenging financially.  Unless you work for a large company, you may not have coverage available to you in a group setting.  Alternatively, you may have something like worker’s comp that will only cover you if you’re injured on the job.  Since 90% of disabilities are illness, not accident related, having only “on the job” disability coverage leaves you underinsured.

Disability insurance for childcare providers is meant to let you sleep at night knowing that your income and financial situation are protected if you’re unable to go to work for an extended period of time.  There are disability policies that are great for childcare workers and some that are not so great.  We can help you find the right policy for your needs.

Disability Coverage for Childcare Employees

If you work for a childcare provider, you may have some coverage already available to you.

As mentioned earlier, some larger corporations have benefits available to their employees that smaller operations simply don’t have.

The Group Option

Workman’s comp may pay some of your bills if you’re injured on the job, but what you should really be looking for is a group option.  There are several types of group plan, some being available at companies with as few as 2 employees.  What’s important is that you know exactly what your plan covers and then fill in any gaps with additional coverage on the private market.

For Example
Let’s say that your employer offers an accident-only disability policy with a benefit length of 6 months.  That coverage is only good if you’re unable to do your job due to injury, not sickness.  You might consider supplementing that coverage with a 6-month short term plan that covers illness and a long-term disability policy to cover everything else.  While 6 months may seem like a long time, it isn’t, considering that the average disability claim is 31-34 months.

True group coverage, like the kind that major corporations offer to their employees, may be rare in the childcare industry.  If you have the option to purchase it, however, it should certainly be considered.  Be sure that the plan allows for claims for to any circumstance (not limiting you to just accidents), that it covers your job as a childcare provider, and that it is sufficient in length and benefit amount.

In an industry dominated by women, group coverage will be your most affordable option.

The Multi-life Option

Another strategy to reduce your disability insurance costs as an employee for a childcare provider is to team up with other workers at your company and buy your policies together.  When quoting disability insurance for childcare providers, some insurance carriers will offer a substantial discount when multiple people at a common company (your coworkers) apply at the same time.  In addition to the discount, and this is especially important in the childcare industry which is primarily made up of women, you’ll also be eligible for gender-neutral pricing.

For Example
Let’s take a 30-year-old woman who makes $30k annually as a child care worker. If she was to purchase a maximum benefit amount (about $1,900 per month), use a social insurance supplement rider, a 90 day waiting period, and select a 5 year benefit length, her policy would cost $98.17 per month.  Should she get two of her coworkers to apply with her and qualify for a multi-life discount, her premium would drop to $66.26 per month, a substantial savings.

These discounts are available from several carriers.  The number of people needed and other requirements vary from company to company.  That is why it is so important that you use an agency that specializes in disability insurance (like ours) to help you shop for the best plan for your needs.

Disability Coverage for Childcare Business Owners

If you own a daycare/childcare business, you may have a few additional options to help reduce the costs of your policy.

Like an employee, a daycare owner will have the option of considering a group plan (if they have employees) or a multi-life plan (again, if there have employees).

But what if the daycare is run by a solo business owner?

Disability insurance for childcare providers is important for all, but critical for a business owner.

After all, if you work for a company and become disabled, you’ll still have a company to go back to once recovered.  If you’re an independent business owner and become disabled, then all of your clients need to find alternatives for their childcare.  You may not have a business to go back to.

The biggest advantage of any business owner disability insurance is the programs offered by the disability carriers.

For one, as a business owner, you likely write off a lot of your expenses.  Since disability insurance is based on your income, some childcare providers don’t show enough income to get the desired coverage.  Many disability companies allow a business owner to get an “income upgrade” which allows you to apply for more coverage than for which you would otherwise qualify.

Disability insurance for childcare providers faces another challenge, in that your occupation class isn’t ideal.

Any profession that involves being physical coupled with stress isn’t going to have the best occupation class.  This is another scenario where owning the business gives you an advantage.

Several disability insurance companies offer “occupation upgrades” for business owners.  This upgrade allows a lower occupation class to move up to a higher class as long as certain criteria are met.  This could include the length of time in business, income, and other requirements.

Both of these upgrades can be a big deal for childcare providers.

Consider someone who runs a daycare from her home.  She makes $70k annually but only nets $40k per year.  She would normally be a 2 or 3 occupation class (middle of the road).

Using both an income upgrade and an occupation upgrade, this daycare owner could have her benefits based on almost $50k per year and could qualify for a top occupation class (the same one that accountants and office workers have access to).

The effect is twofold.  She can get more coverage for less money than if she didn’t own the business.

Using these carrier programs is essential in securing the best possible coverage for your situation. Disability insurance for childcare providers is no different. That is why we help you shop the major insurance companies to find the best disability insurance coverage for your unique requirements.


Disability insurance for childcare providers doesn’t have to be confusing or expensive.

Whether you’re a childcare worker at a company or you operate a daycare out of your home, making sure that your income is protected if you have an accident or illness, is crucial.

Make sure that you shop all of the major carriers for your disability insurance. Take advantage of the programs that the carriers offer to help you reduce your costs.

We help people buy the best disability insurance policy for their needs. We offer expert, unbiased, advice about disability insurance. If you’re a childcare provider who needs disability insurance, then we can help.

For a complimentary quote, complete the form on the left.  If you’d rather discuss your situation in person, please contact us and we’ll get you the policy that you need.



About Raymer Malone, CFP®
About Raymer Malone, CFP®

Raymer Malone, CFP® is principal and owner of www.highincomeprotection.com, an online insurance agency that specializes in disability insurance.  Ray has been in financial services since 1998 and has been life and health licensed since 2004. He started his company to help consumers get access to disability insurance products online and to provide them with the proper direction in selecting a policy. Ray resides in Lake Tahoe, NV with his wife and two children.

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