Many people dream of becoming an independent entrepreneur. People often think that as an independent entrepreneur you have more freedom, more vacation and of course more income. Being an independent entrepreneur does have advantages. Unfortunately, there are also a few drawbacks. A known disadvantage is the lack of a good safety net in the event of disability.
What does the government do for you?
If you are no longer able to work as an independent entrepreneur (due to illness or an accident) then you do not have to expect much from the government. In the past there was a kind of basic provision (the Waz). However, this scheme was completely abolished in 2004. So you are on your own. The only "safety net" that the government offers is a social assistance benefit. However, before you receive such a benefit, you will first have to use your savings (and any surplus value). As a result of work disability, you can not only lose your business, but also your savings and your house!
What can you do yourself?
You can consider taking out disability insurance. Are you incapacitated for work? Then this insurance offers good protection against the financial consequences of your disability. In addition, you can of course put money aside for bad times. However, this does not provide the assurance that insurance can offer you. Finally, there are also so-called "bread funds". Here you put money together with a group of people. The deposited money comes in a kind of joint piggy bank. If someone from the group becomes incapacitated for work, he or she will receive a temporary benefit from the collective savings bank. In short, there are various solutions to protect yourself against the financial consequences of disability. However, insurance remains the best solution. Not the cheapest. Well the best.
You can insure the financial consequences of disability. Of course you do not have to insure more than necessary. Have you built up a substantial financial buffer? Then you may opt for a somewhat longer waiting period, which means you will receive a premium discount. Does your partner also have an income? In that case you can opt for a somewhat lower insured amount. Customization means you do not insure too much (and you do not pay unnecessary premiums).
It is often thought that disability insurance is expensive. In practice, that is not so bad. By adjusting the insurance to your personal situation, a lot can be saved on the premium. Nowadays there is no longer any surcharge in the premium from which the consultant is paid (commission). Finally, the premium is also tax deductible. For these reasons, the premium is often (much) lower than people think.
Save yourself for a buffer
It sometimes happens that entrepreneurs do not take out disability insurance because they want to provide a piggy bank themselves. However, it is uncertain or someone becomes unfit for work, but also when that will be then. As a result, this plan offers no certainty. If one already has a piggy bank that is large enough to stop working immediately, disability insurance is not necessary. In all other cases, disability insurance is not a superfluous luxury.
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