Intro
It's safe to assume that barbers and hairstylists don't give disability insurance much of a second thought. However, you are conscious of the value of continuing success. You take pleasure in improving your clients' confidence and self-esteem. Being able to wash, cut, trim, style, color, converse (yes!), and more is crucial to your livelihood. But what if you suddenly found yourself unable to do such duties? When you think of getting sick, injured, or disabled, do you ever worry about what might happen? You can't afford to live if you can't work, right? Disability insurance (also called disability income insurance), is coverage you may want to protect yourself in case you get sick or hurt and can't work for a long time. Disability is not just a theoretical possibility; one in four working adults will become disabled during their working years.
Why does every hairstylist need disability insurance?
Disability insurance, or income insurance as we like to call it at Asteya, is a policy that supplements your income in the event you’re unable to work due to illness or injury – you can think of it as your financial safety net. Disability insurance is often overlooked because people either are unaware that it exists or have the wrong idea behind what it actually is.
According to the 2022 LendingClub report, 61% of Americans live paycheck to paycheck. The report also found that even the highest paid workers are having trouble making ends meet.
When you work in the beauty industry, you're constantly on your feet. As a hairstylist, disability insurance will protect you in the event of an accident in the salon, while driving your client to a wedding or event, or if you suddenly become too ill to work.
Disability can happen to anyone no matter the type of industry you’re in. In fact, and according to a study, 90% of long-term disabilities are caused by cancer, heart disease, and arthritis. The same study shows that 95% of accidents and illnesses that can get in the way of your work are not caused by the job itself. This is why hair stylists, beauty professionals and barbers need disability insurance so much.
“It won’t happen to me”
You believe it won't. But, long-term disability affects between one-third and one-fourth of all workers. According to research, one-third of all employed Americans will become disabled for at least 90 days at some point during their careers. Nonetheless, not having disability insurance is a typical financial mistake.
For this reason, thinking about buying a private disability insurance policy can be the best way to protect your income sufficiently. Ideally, a private DI policy should cover 60-80% of your income as a hairstylist.
“I have an emergency savings account that I can rely on, I don't need disability insurance"
Even if you have enough savings to provide you with a safety net when the unexpected happens, disabilities are unpredictable and can happen anytime, anywhere, not to mention, they can last for weeks, months, or even years. Even if you have enough money saved to cover you for 6 months, your inability to work could extend beyond that – then what? There are also no restrictions with what you can spend your disability benefit on, which means that you could use it to pay for medical bills, deal with any other unexpected expenses, or simply to just pay your grocery bills.
“I can get benefits from SSDI, I don’t need additional coverage”
For some people that become disabled, they can get Social Security Disability Insurance (SSDI) benefits from the Social Security Administration (SSA). However, disability benefits from Social Security are insufficient. The payouts can be small and limited.
As of 2021, the average monthly payment received by people with a disability through social security benefits is approximately $1,280 per month, or $320 per week, which is usually not enough to meet basic living costs, let alone retirement and other long-term goals. Having a private disability insurance policy can be the best way to protect your income sufficiently as it typically covers 60-80% of your income as a hairstylist.
“Getting a private disability insurance policy is too expensive, I can’t afford it”
Protecting your income shouldn’t be a luxury, so here at Asteya, we’ve created affordable and easy solutions that won’t drain what you’re trying to protect (your income!). Here at Asteya, we offer disability insurance (or disability income insurance, as we like to call it) that’s simple, fast, and affordable. Our 100% digital process means we don’t tire you out with proof of income, medical exams, phone interviews, or wait times, so you can go from applicant to insured in no time. Our prices start as low as:
Permanent Disability Income Insurance: starting at $6.05/month
Sickness & Injury Disability Income Insurance: starting at $5/month
How much disability coverage do hairstylists need?
How much you pay for disability insurance as a hairstylist is determined by several factors, including the policy options you choose (such as the benefit amount and waiting period length) and your individual needs (such as your health and the nature of your business). Your premiums will always be lower if you sign up for health insurance when you're still young and healthy.
To better help you understand how much coverage you may need, look at the areas in your life that need to be covered and then calculate how much you spend on each monthly:
- Housing
- Utilities
- Food
- Childcare
- Loan payments
- College savings and/or tuition
- Retirement savings
- Auto expenses
- Any other recurring bills
Then, look at your monthly business costs:
- Rent or mortgage
- Utilities
- Insurance
- Pay, benefits, and other forms of payment
- Taxes
- Loan payments
- Miscellaneous
Most of the time, you can only get coverage for 60-80% of your personal income, but you can get coverage for 100% of your fixed monthly business costs. When you start looking for a policy, you need to have a good idea of how much your personal and business expenses are.
How much does disability insurance for hairstylists cost?
Insurance companies underwrite disability coverage based on the likelihood of a claim being filed by an applicant. They also consider how much and how long a person can receive those benefits.
You should also know that your profession has a significant impact on your premium rate. Insurance companies classify jobs based on their hazards, as some are more prone to injury or illness than others. Different jobs are classified according to their level of risk.
Your career may also be evaluated based on how difficult it is to return to work after an injury or illness. The more difficult it is to perform a job with certain injuries or illnesses, the higher your premium will be.
Your needs and way of life are unique to you, just like your business has its own customers, processes, assets, and liabilities. When it comes to a disability insurance policy for hairstylists, it needs to be customized with a specific benefit amount and length that addresses these needs.
A policy with a smaller benefit, a longer waiting period, and a shorter benefit period will cost less than one with a larger benefit, a shorter waiting period, and payments that last until retirement.
Overall, the average cost of your insurance can be anywhere from $400 to $5,000 a year. It all depends on what kind of insurance you choose for your hair salon. Once you find a policy that works for you, make sure to get proof of insurance right away so that you are protected from the start.
In general, you should expect to pay between 1-3% of your annual salary. Your income has a direct impact on the amount of coverage you’ll receive, so the higher your income, the higher your benefit amount and the more you can expect to pay in monthly premium.
How to apply for disability insurance as a hairstylist
As a hairstylist, there are two things you should look for in a disability insurance policy.
First and foremost, you should make sure that any coverage you purchase is both guaranteed renewable and cannot be canceled. So long as you keep paying your premium, the insurance company is bound by the terms of your policy and cannot cancel it or alter its conditions in any way.
Nothing beats the satisfaction of paying the premium of a 20-year-old when you're in your fifties, so this is especially significant if you're buying the coverage when you're young and healthy.
Asteya’s disability policy is the right fit for you, it’s quick, easy, and totally online.
At Asteya, applying for disability insurance as a nurse practitioner is incredibly simple. The application is completely digital so there’s no need for medical exams, blood tests, phone calls or lengthy paper applications. Asteya's underwriting occurs in real-time which means you can obtain a policy in 30 minutes or less!
What are the typical extras that freelancers need to add to their insurance?
Workers' compensation Let's say you decide to open a salon and get more customers than you can handle on your own. Isn't that great? Your work is great, and now you have too much to do! But you might need to hire more stylists to keep up with the demand. If you own a business with employees, you must offer workers' compensation.
You can get workers' compensation insurance to pay for the medical bills of your workers. For instance, if an employee gets hurt on the job, worker's compensation will pay for the employee's medical bills. This insurance covers everything from small injuries like cuts from scissors to major accidents on the job. If you don't have worker's comp insurance, you will have to pay for your own medical bills. Most states require you to have worker's compensation, so it's in your best interest to have it no matter what.
Property insurance for businesses You found the perfect place for your salon and started taking customers. All of the decorations are just how you want them, and your customers love the atmosphere. But one night, the kitchen fire at the restaurant next door spreads to your salon.
The damage won't be impossible to fix, but it will still cost a lot. No one wants to deal with damage to their property, especially when the costs to fix it add up fast.
If you have a salon with a building, you need to get commercial property insurance. Commercial property insurance will pay for repairs if there is a fire, a break-in, or something else out of your control that causes damage. This insurance will also pay for any damage to your property's equipment that happens during an event.
Insurance for broken-down equipment If you own a beauty salon that offers many different services, you may have a lot of hair stylist equipment, from hairdryers to nail dryers to spa rooms and everything in between. Equipment doesn't always work the way it's supposed to, which is a shame. You can get equipment breakdown insurance if your equipment breaks down and it's not because of something unexpected. This kind of insurance pays for losses caused by things like broken machines. Some of these mechanical problems are with heating, cooling, and tanning beds.
If you own the building where your hair salon is, you should think about getting this equipment breakdown insurance. Commercial property insurance won't pay for these kinds of problems. You would want to protect the mechanical systems in your salon if you put money into them.
Product liability insurance You can look into product liability insurance if you own a salon that sells products. If a customer is unhappy with a product you sold them, these policies will protect you.
The bottom line
No matter your occupation or your background, disability insurance should be one of the main policies that you should consider getting. The peace of mind that comes with having disability insurance is knowing that you and your family's living expenses will be covered no matter what happens to you.
If you're still on the fence about whether disability income insurance is for you (hint: it is), here are a few extra points to consider while thinking about it:
- Asteya’s policy is a no-brainer, seeing that it is 100% digital. We don't require blood tests or doctor's appointments, unlike other insurers. We'll just ask you a few questions to determine your best policy.
- You’ll be all set once your policy is in place! You'll pay your premiums quarterly, monthly, or annually for the duration of your policy.
- If the unexpected happens and you need to file a claim, our team will be there to assist you in receiving the funds you require as soon as possible. When your claim is approved, you'll receive a payout that you can put toward whatever you need, such as bills, groceries, or medical expenditures.