Intro
When you work as a real estate agent, whether you’re an employee or an independent worker, everything depends on you. It can be hard to take even one day off from work. But what if you got sick or injured so you couldn't work and had no income for months? How would your business or practice stay in business? How would you make a living? 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. That’s why disability insurance (also called disability income insurance) is the coverage you should seek 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 real estate agent need disability insurance?
As a real estate agent, it is logical to get a policy that covers both income loss and total disability. Many disabilities limit your capacity to earn the same income because your ability to work will not be the same. You should search for an insurance that would pay you an income if you become disabled. This can support in your return to work because you may require some time to restart your prospecting and marketing activities in order to generate new listings and sales.
Your job keeps you constantly on the move from open houses and client meetings to home tours and neighborhood research! Your ability to tour properties, represent clients and show homes is what keeps paying the bills.
What if you couldn't do that job anymore? Have you ever considered what might happen if you became sick, ill, injured, or even disabled? If you couldn't work, how would you pay your bills? Well, your hard-earned lifestyle and future plans could be jeopardized in an instant.
“I didn’t know there is such a policy as disability insurance.”
Health, life, car, and home insurance are common policies that we go for to protect our loved ones and our possessions and we think it's more than enough. That's why disability income insurance is often overlooked to the point of not knowing it's an option!
Here’s a small definition of Disability insurance:, this policy protects your income if you ever find yourself unable to work for more than three months due to illness or injury. That’s why you might also have heard it called income insurance—because it replaces the income that you would have received during the time that you’re off work.
“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 happen, disabilities are unpredictable and might happen anytime, anywhere. Even if you have enough money for 6 months, your health problem could last much longer than that. You might need that emergency fund to help pay for medical bills or deal with any other unexpected expenses.
“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.
“I can get benefits from SSDI”, disability benefits from Social Security are insufficient.
Some people believe that if they become disabled, they can get Social Security disability benefits from the Social Security Administration (SSA). However, the SSA's Social Security Disability Insurance (SSDI) payouts are limited.
As of 2021, the average monthly payment received by disabled people through social security benefits is approximately $1,280 per month, or $320 per week.
But there are two issues with relying on this:
First, you need to have worked five years full-time within the last ten, which might be difficult to prove for freelance and independent workers.
Second, even for higher-earning freelancers and gig workers, this is typically not enough to meet basic living costs, let alone retirement and other long-term goals.
For this reason, thinking about buying a supplemental disability insurance policy can be the best way to protect your income sufficiently. Ideally, a supplemental DI policy should cover 60-80% of your income as a freelancer.
“Getting a supplemental 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!). 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 real estate agents need?
Disability insurance can protect two separate things. One is your fixed expenses, which include things like your mortgage, car payments, utilities, taxes, child care, investments, and so on. Another thing you may wish to safeguard is your lifestyle, which includes things like shopping, entertainment, travel, hobbies, and so on. We always advocate having at least enough coverage to cover all of your expenses throughout a period of disability.
Having said that, many people worked hard to achieve where they are today and are content with their current lifestyle. It would be tough to change these spending patterns during a disability, which is why you should consider protecting the sum of money you now spend to avoid financial stress.
Technically speaking, all of the companies that sell disability insurance cover your net income. How much do you make in total? It is basically your gross income minus the money you spent on your business. Your net income is the amount left over. If you give yourself a salary, add that back to your net income.
Why don't carriers ensure your gross income but only your net income?
Your net income is the amount of money you need to pay for things like your electric bill, groceries, mortgage, etc. To put it another way, it's the money you need to live.
If you’re disabled, you don't pay business expenses, right? Because of this, carriers pay attention to your net income.
How much does disability insurance for real estate agent cost?
It's less expensive than you think. Most disability coverage for real estate agents ranges between 2% and 6% of your annual salary. The ideal time to buy disability insurance is while you are young and healthy.
In other words, depending on your age, income, and health, you could pay anywhere from $1 to $3 per day or more. Is $3 per day really that bad? Or how about $5? Not really, given how essential your ability to earn a living is to you and your family.
And so, when it comes to the policy, it needs to be customized with a specific benefit amount and length that address these needs, as well as other components such as a Cost-of-Living Adjustment rider to take inflation into account.
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.
How to apply for disability insurance as a real estate agent?
In general, if you’re an employee, you pay for group (i.e., work) disability insurance using pre-tax deductions from your paycheck. While this appears to be beneficial because it reduces your income for tax purposes, it’s not as favorable if you need to accept a benefit because it becomes taxable income.
What exactly does this mean?
You must report your disability compensation and pay taxes on it by April 15th of each year, which can put further burden on your budget. As a result, your net disability pay is around 30-40% of your gross wage. Can you support yourself and your family on that?
So the best way to protect your income is to get a supplemental disability insurance policy.
Asteya’s disability policy is the right fit for you, it’s quick, easy, and totally online.
Most insurance companies may need four to six weeks to process your application during the underwriting phase. They will review all of your information and decide how much benefits and coverage they can provide you with, as well as help you decide on the premium that fits you best.
Don't want to wait that long? Same.
Asteya's underwriting occurs in real-time; you can obtain a policy in 30 minutes!
You can choose "no exam" disability insurance to speed up the process; since no doctor visits or blood tests are required, your application can be assessed much more quickly. If you have some pre-existing problems that would prevent you from obtaining regular disability coverage elsewhere, this is also an excellent choice.
What are the typical extras that real estate agents need to add to their insurance?
Additional benefits include, but are not limited to, partial disability, recurrent disability, and a survivor benefit if you die as a result of your disability within a certain timeframe. You can pay extra to add riders to your policy to make it fit your needs and budget better. Some popular options for riders for real estate agents and realtors are:
Return of Premium Rider: You will get your premiums back if you never use any of the benefits.This rider option sounds great, but it is usually very expensive.
Guaranteed Insurability Option Rider: This lets you get the coverage you need now and gives you the option to buy more coverage in the future without having to show proof that you are in good health. Up to the age of 55, you can typically purchase additional coverage every two years.
Retroactive Injury Benefit Rider: Pays benefits from the date of injury-related disability until the end of the elimination period if the disability happens within 30 days of the injury.
Rider for Activities of Daily Living: This rider provides an additional benefit if you are unable to do two or more things that people do every day. It will also pay if you are cognitively impaired.
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.