Disability Insurance for Consultants: What You Need to Know in 2021

Why consultants from HR to IT need disability insurance, how much it costs to protect your income (and expertise), and the easiest way to shop for coverage.

When a company or organization doesn’t know how to address a problem or wants to improve its operations, it often turns to a consultant.

Consultants are objective third parties that help a company’s management see things differently. If they do their job well, consultants can greatly impact a firm’s bottom line. As such, they are in great demand and get paid well.

You are used to being the expert others turn to for advice. When it comes to protecting your income with disability insurance, however, don't be afraid to ask for help.

Why do consultants need disability insurance?

If you're a typical consultant, you:

  • Have a great deal of expertise that companies will pay generously for.
  • Earn an average annual salary of $75,000 to $100,000 depending on whether you are a management consultant, corporate consultant, or independent consultant.
  • Are self-employed, which means you have unlimited income potential.
  • Don’t earn any income if you don’t work.

As experts in their respective fields with a roster of paying clients that depend on them, consultants have a lot to lose from being out of work. This highlights the value of owning a personal disability insurance policy to protect your current income and future earning potential.

  • According to the Social Security Administration, about 25 percent of 20-year-olds will become disabled at some point before reaching age 67.
  • A number of accidents and illnesses can prevent or limit your ability to work in your profession.
  • You may owe thousands of dollars of student loan debt. This debt will not be forgiven if you can't work due to a disability.
  • Even if you can do other types of work with a disability, the odds are you will earn a fraction of what you make as a consultant.
  • Even if you don’t make a lot of money today, that might change in several years. In fact, about 20 percent of independent consultants make six figures. It’s better to buy disability insurance at a young age.
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How much does disability insurance cost for consultants?

For consultants, disability insurance cost depends on the following personal factors and policy decisions:

  • Your age and health. The younger and healthier you are, the less you will pay.
  • Your income. Disability insurance is designed to replace a percentage of your income if an injury or illness limits your ability to work in your profession. If you’re self-employed, you will need to provide business tax returns for the previous two years to demonstrate how much you earn. If you’re a new consultant but are working in the same industry, you may be able to use your previous income to qualify.
  • Where you live.
  • The benefits and features of your disability insurance policy.
  • The type of consulting work you perform.
  • How much you travel for your profession.

Although these are just estimates, consultants can typically expect to spend somewhere in the ranges shown below:

  • A 30-year-old male consultant making $70,000 in Boise, Idaho could get a $1,200 monthly benefit for about $18 a month, a $2,400 monthly benefit for $33, or a $3,630 monthly benefit for $48.
  • A 38-year-old female consultant making $95,000 in New Orleans would pay about $47 a month for a $1,600 monthly benefit, $90 a month for a $3,200 benefit, and $134 for a $4,800 benefit.
  • A 46-year-old male consultant making $140,000 in Atlanta would be quoted about $69 a month for a $2,200 monthly benefit, $135 for a $4,400 monthly benefit, and $201 for a $6,600 monthly benefit.
  • A 55-year-old female consultant earning $200,000 in Chicago would pay about $169 a month for a $3,100 monthly benefit, $334 for a $6,200 monthly benefit, and $502 for a $9,350 monthly benefit.

These quotes assume a five-year benefit period and a 90-day waiting period. The information displayed above features estimates that are being used solely for illustrative purposes. Individuals who fit the profiles described above may be subject to rates that are higher or lower than the rates shown here. To see your monthly personalized disability insurance rates, get a personalized quote with Breeze.

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What occupation class is a consultant?

Disability insurance companies group jobs into specific occupational classes. These classes take into account the hazards of the job and the difficulty in returning to work following a disability. Another factor is the claim experience associated with certain professions.

Insurance companies generally classify occupations on a scale of 1 to 5 or 6. Typically, the higher the numerical value of the classification the lower the rate available from the insurance company.

Because consultants cover a wide range of tasks, specialties, and industries, disability insurers vary on how they rate the occupation. Therefore, it’s important for consultants to survey several providers to get the best deal.

Disability insurance companies typically rate consultants from a 3 to a 5. Some companies offer different classes based on income levels. Others classify consultants based on the industry they primarily consult in; for example, a human resources consultant will be rated similarly to those working in human resources.

Consultants can specialize in a variety of industries or disciplines, such as management, IT, human resources, marketing, or compliance. But one thing most consultants have in common is the need for disability insurance to protect their income against the risk of being unable to work due to injury or illness.


Jack Wolstenholm is the head of content at Breeze.

The information and content provided herein is for educational purposes only, and should not be considered legal, tax, investment, or financial advice, recommendation, or endorsement. Breeze does not guarantee the accuracy, completeness, reliability or usefulness of any testimonials, opinions, advice, product or service offers, or other information provided here by third parties. Individuals are encouraged to seek advice from their own tax or legal counsel.

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