As a home based worker, insuring your income can be a bit of a challenge in some situations.
The question is what do you do and how mobile do you have to be to do it?
To be clear, I'm talking about those people who earn an income rather than those who are in unpaid occupations. The later is another article.
I'll be exploring a few situations and the insurance approach for paid home based workers, to give you a bit of an idea about how you can protect your income if you work from home.
1. Home-based worker 100% of the time.
Ok, this is the hardest situation to justify to an insurer. Mobility is the greatest cause of disability claims, be it physical or psychological.
Getting to and from your place of work is one of the primary issues with disability claims. So in the situation of someone who lives where they work the question is what is going to stop you from working.
If you can still make it to the bathroom and the kitchen, what's stopping you from working?
This is a 2-way street, is the insurer going to be 'had' for a claim which is difficult to manage back to work because of the working location?
or on the other hand is the client wasting their money if there is no chance the client will be able to claim in their situation?
If your job has a physical aspect to it, it is easier to justify the insurance, for example, home-based shirt ironing service, no pickup or drop backs to clients, making it 100% home based but it needs you to be physically mobile to complete your primary tasks.
This is easier to justify than say a financial trader who, in all honesty with the right technology, could be propped up in bed continuing to earn an income even though they have mobility problems. Like I said this end of the home based business scale can be challenging to insure for income protection, exactly what you do will be the primary consideration in assessing your cover.
2. You're a 50/50 home based worker
You are home based for your admin and phone work but you have a requirement to be 'out' for half of what you do.
This situation is easier to insure than the 100% home based worker due to the need for mobility outside the home. With this situation there is the ability for an occupational therapist, at claim time, to quantify what tasks you can manage and those you can't do when compared to the examples above.
This makes managing your future claim(s) easier for all concerned. Financially it is often easier to allocate earnings to activities in this situation to assist with justifying insurance cover.
Telecommuting workers often fall into this space but the questions at underwriting often look like the 1st example, as telecommuting can often be 100% home based if required.
What you do and what your financial accounts show will be equally important when justifying why an insurer should take on your income risk.
3. You're in the 90/10 situation, or something close
This is both the most common and easiest situation to insure for a home based worker.
You have a need to maintain a workspace at home for admin but you spend most of your day out and about. Sales reps, contract workers, home-based services businesses are often in this situation.
In these situations we take an approach very similar to a regular workplace based person, as how you derive your income is primarily outside the home. Financial records will be more relevant in justifying cover to an insurance company than the home situation, what you do will also be a factor.
I hope this assists with understanding the questions you need to ask about protecting your income; now it's time to ask them.
Give us a call, we're specialists in income protection and can help you find the right answer for you.