As a professional hairstylist, you’re likely on your feet most of the day in a physically demanding job. Whether you’re called a barber, cosmetologist, or beautician makes little difference in the likelihood you become disabled and cannot do your job. The best disability insurance for hairstylists depends on several factors. If you’re interested in protecting your livelihood from an illness, sickness, or accident that prevents you from working, then read on.
What to Expect-Disability Insurance for Hairstylists
Disability insurance plays a critical role in protecting your lifestyle should you be unable to work. Most professions, including hairstylists, barbers, hairdressers, and cosmetologists, need disability insurance.
The average disability claim is between 31 and 34 months. That means you should look for a long-term disability insurance plan with at least 2-5 years of benefit length.
Individual long-term disability insurance is priced according to your age, gender, health, and occupation. Disability insurance for hairstylists is no different. As a hairstylist, it is crucial that you shop for coverage amongst all major carriers, since each company has their own classification of your career. This is known as your occupation class.
The average age of a hairstylist is 39 and over 90% of the hairstyling industry is female. With the average income hovering just below 23k annually, not everyone can purchase disability insurance.
For those earning close to the average, the cost of individual long-term disability insurance may be prohibitive. You may, however, be covered in other ways, such as through social security or through your state.
Social Security Disability
Social security pays disability benefits to people who can’t work due to a medical condition that’s expected to last longer than one year (or result in death).
You must have paid into social security for a period of time to make a claim. There are also two “tests” that must be passed on most claims: recent work and duration of work.
The recent work test is a set of rules for how much you must have worked based on your age of disability. For the average hairstylist (age 39), you must have been working for 5 of the last 10 years to pursue a social security disability claim.
For the duration of work test, your work need not fall into a certain period of time; it just needs to have been completed. The time varies based on your age when you become disabled. For the average hairstylist, you’ll generally need a little over 4 years to meet the work test.
If you qualify, the benefits are limited but still valuable. They are based on your previous earnings. The average social security disability benefit is $1,171.
State-based Disability Insurance
If you live in California, Hawaii, New Jersey, New York, or Rhode Island, then you live in one of the few states that offer disability insurance to their residents.
This coverage is only meant to last 6-12 months and is normally not enough to maintain your lifestyle; however, when you’re unable to work, every little bit helps.
Individual Disability Insurance for Hairstylists
Depending on the factors outlined above (age, gender, and health), it may make sense to pursue private disability insurance.
Younger and healthier folks pay less premiums for the same benefits than those who are older and not as healthy. Women pay more than men, but plans can be built to offset that issue.
Your occupation is also looked at differently by each insurance company. Some carriers have plans built specifically for blue-collar workers and independent contractors/business owners. Others do not. This is why it is important to work with an independent agency that specializes in disability insurance.
There is no such thing as the best disability insurance for hairstylists. What’s best for you may not be what’s best for your peers.
What to Look For
Several programs are offered by the carriers who sell disability insurance for hairstylists. To see if you qualify, there are several things to consider.
The Insurance Company
Not all disability insurance companies are equal when it comes to professional hairstylists.
Some will only offer a policy with a low occupation class, which causes higher premiums. Others are much friendlier to your profession and will cost substantially less.
Shopping for your disability insurance is one of the best ways to get the coverage you need at a cost you can afford.
Are You An Employee?
Do you lease/rent your chair, or do you actually work for the salon?
Being an independent contractor has advantages and disadvantages. You can only buy disability insurance on your net income, so the business expenses you deduct cannot be covered by an individual disability insurance policy. However, you may make more money than an employee, allowing you to purchase more coverage. You may also qualify for self-employed discounts/upgrades, which allow you to pay less or purchase more than you’d otherwise be qualified to do.
Do You Own The Salon?
One step above leasing/renting a chair as an independent contractor is owning the salon.
As a business owner, you’re eligible for the same program discounts/upgrades as any self-employed individual would be, but you might be able to purchase additional coverage to help cover your business.
Disability insurance for hairstylists covers your personal income losses should you be unable to do your job. It helps you pay your mortgage, utilities, and buy groceries. But as a salon owner, those aren’t your only expenses. You also have the expenses incurred by the business, from the lease on your building to the insurance required to operate; these costs must be accounted for.
If you own the business, consider purchasing business overhead expense coverage.
Personal disability insurance for hairstylists covers personal expenses, whereas business overhead expense (known as BOE) insurance covers your business expenses, should you be unable to work due to sickness or injury.
BOE typically covers any expenses that are deductible for federal income tax purposes, such as liability insurance premiums, mortgage/rent, salaries, and utilities. If you have a business loan, then you may purchase insurance to cover those payments.
Summary
Disability insurance for hairstylists can be challenging to purchase. There are many factors to consider, and if you’re trying to do it on your own, it can quickly become overwhelming.
We’re an independent agency that specializes in offering expert, objective advice in helping you shop for your disability insurance. The policies are priced the same whether you use us or not, so why not have assistance in purchasing your policy?
Remember, there is no “best” disability insurance for hairstylists. The policy that pays a claim when you need it most is what’s most important.
Contact us today for a confidential, complimentary consultation. We can help.
