Marijuana Business Owner Disability Insurance (A Better Approach)
Posted in Marijuana Industry last updated on November 8, 2021What will you do if you become totally disabled because of an accident or illness? What will happen to your business? Getting marijuana business owner disability insurance can be tough because of the industry. Although, it’s not impossible like some people might tell you.
The problem is that most disability insurance companies will NOT consider disability insurance for marijuana business owners.
How will you manage to survive and more importantly – how will your family cope if you became totally disabled? Maybe you provide the primary income. Maybe you’re not. It still can be a rough hit to any family’s financial situation. For marijuana business owner disability insurance, this can get even trickier because of their industry.
Consider this case study.
Traditional Disability Insurance Plan Leaves Marijuana Business Owner Under-insured
For confidentiality reasons, we will refer to the business owner as Dave. He owns a highly profitable medical marijuana dispensary in California. Dave, who is 44 years old, brings home $350,000 a year to his family. Originally, we went through the traditional methods for getting disability insurance. The problem was the traditional insurance companies only wanted to give him $10,000 a month of coverage. Max. Compare that to the $29,000 he was bringing in every month.
Who can survive on 34% of their income? Normally disability insurance covers about 60%.
You might be thinking, that’s still 10k every month! But that would mean Dave would have to sell his house, move his family, invest less in his retirement and children’s college tuition, as well as find the money to cover any medical expenses his health insurance won’t cover.
This would have left Dave obscenely under-insured. However, he asked for a second opinion from an insurance agent at Marcan Insurance since we specialize in the the needs of people working in the marijuana industry. We found him $19,000 from Lloyd’s of London, a non-traditional insurance company friendlier to the marijuana industry. Whereas the traditional insurance people told him more coverage would be impossible.
Dave’s family is now protected.
We found Dave a plan which would pay an additional $9,000 dollars every month of his disability. $19,000 per month in total should he become disabled. This brought his overall coverage up to 65% of his annual income. (Remember how it’s normally around 60% for traditional carriers?) This better coverage left Dave worrying about one less thing.
The majority of traditional disability insurance plans do not cover high income earners adequately at all.
When you can’t find adequate coverage through traditional insurers, you should use an independent agent such the ones here at Marijuana Insurance. If you are seeking marijuana business owner disability insurance or are having problems finding adequate coverage or any form of disability insurance, then call us today at (888) 987-8447.
Reasons to Consider Marijuana Business Owner Disability Insurance
More than 30 states throughout the U.S have passed legislation allowing medical marijuana or recreational pot use.
Yet because marijuana remains illegal at the Federal level, most insurance companies will not approve policies for marijuana industry business owners. This includes disability insurance.
Although recreational smokers are being treated more liberally by insurers, marijuana business owners are still largely prohibited from enjoying the benefits of disability coverage.
At Marcan Insurance, we know this is unfair. It is ridiculous that so many marijuana business owners who apply for disability insurance get declined solely based on their industry.
Disability insurance is vital because it protects you and your family from a critical loss of income resulting from a serious illness or injury. Most people believe it will never happen to them. Yet 1 in 4 people in their 20s today will be unable to work for over 3 months due to an illness or injury over the course of their careers.
Having disability insurance will ensure that you continue receiving an income to maintain the quality of living you have become accustomed to and need to maintain.
But what about business owners in the marijuana industry?
As a business owner (regardless of industry) you will most likely buy insurance for your car, your home and your possessions – but what about yourself? You can always sell your business to cover costs, but what then if you recover? For business owners, disability insurance can mean the difference between selling or not.
Disability insurance will provide vital financial coverage to cover your lack of ability to work and earn an income because of an accident or illness.
If you’re like most Americans, a recent survey found that 62% of those questioned believe that they have less than a 2% chance of becoming totally disabled for 3 months or more during their working career. Remember that 1 in 4 statistic?
We hope nothing bad happens to you. We also hope you seriously consider the statistics and take protective measures. Disability insurance will enable you to do the following:
- Replace a significant portion of your lost income
- Help you pay your mortgage
- Pay your bills
- Pay for your personal outstanding debts
- Allow you to put food on the table
- Avoid having to liquidate your assets
- Avoid having to deplete your savings
- Financially carry you until you can return to work
Accidents and illness are not always avoidable. They happen to anyone at anytime. The reason is because 1 out of every 4 marijuana industry business owners is going to suffer a disability at some point in his/her career. The odds of starting a successful business are lower than that.
Marijuana Business Owner Disability Insurance Plans – Nuts and Bolts
Everyone is different. Many traditional disability insurance plans are not suitable for everyone.
Asides from being excluded from being approved because you are in the cannabis business, you might face additional challenges.
Some marijuana business owners may not be approved for disability insurance because of the following:
- Age
- Tax verifiable income
- Employed in a risky occupation
- Location of their workplace
- Medical history
- Risky behavior
It’s hard enough for a marijuana business owner to find a disability insurance company to cover their situation. If you have other issues, it might make search even harder to find coverage.
There are also plans which cover partial disabilities should you only be able to work part time.
Most disability insurance plans pay around 60% of your overall income. However, this is a sliding scale. Lower income people tend to get slightly over 60%. Whereas, high income earners can receive as little as 30% of their monthly income.
A High Limit Plan for Cannabis Industry Business Owners
We’ve talked about Petersen’s International Underwriters before in Dave’s story. They sell Lloyd’s of London policies in the United States.
Petersen’s is governed by different rules than the traditional disability insurance industry. They can provide supplemental coverage where needed. More importantly, they can provide coverage which traditional carriers can’t or won’t provide. They are allowed to do things differently because they’re “non-traditional.” When you hear of an actress insuring her legs, that’s probably Petersen’s.
Most highly compensated marijuana business owners would find themselves under-insured (or uninsured) using a traditional disability insurance carrier.
The reason is because most traditional disability insurance plans tend to decrease the participation limits (monthly income replacement amount) as the amount of a person’s income levels increase.
The result is that the applicant needs buy multiple disability income policies. Which is known as “layering” policies. That’s often the only way to adequately cover high income people. For many high income marijuana business owners, this may be the only way to find adequate coverage.
We love working with Petersen’s because they can make offers to our clients who might be otherwise get stuck with a joint and no lighter.
Overview of High Income Marijuana Business Owner Disability Insurance Plan
High income disability insurance plans can provide a maximum of 65% coverage for your overall total income. The features of this policy work the same way as traditional disability insurance policies. Only they allow for a high monthly benefit.
Definition of Total Disability
The high income earner plan which we feature offers a unique approach to the term “total disability.” The reason it is unique is because it refers to your inability to work because of an accident or illness in your stated and primary occupation. But, it does not exclude you from coverage even if you earn income from some other form of occupation.
This is termed “Own Occupation” in the disability industry.
Benefits Payable
Your benefits will continue to be payable on a monthly basis so long as you are medically defined as totally disabled and will cease at the conclusion of the benefit period. Multiple separate claims can be payable as they arise.
A lump sum payment is also payable in the event that your doctor declares you “permanently and totally disabled.” The lump sum payment can be as high as 10 Times your annual income at the time when the disability occurred.
Optional Disability Insurance Riders
Additional Coverage is available through disability insurance riders. The downside they are usually cost extra. These riders include:
• Residual Rider – Where an illness or injury does not result in total disability. Sometimes this is called partial disability. This means that you are only able work part-time or earn reduced income. This rider will pay a monthly benefit should your income be reduced by at least 15%. Plus, if your income diminishes by as much as 80 % then you would be eligible for full monthly benefits. (Strongly recommended.)
• Cost of Living Adjustment Rider – The Cost of Living Adjustment (COLA) covers inflation for long term disabilities. This rider adjusts your disability benefits to the Consumer Price Index each month so that your benefits could increase as high as 10% over the course of each year. (Typically an expensive rider. Not always worth it if you apply for coverage over age 45.)
Benefit Period
In this plan, your disability benefits are payable anywhere from 1 month to age 65, or as long as the total disability lasts.
Premiums
Our carrier’s plan also offers a great deal of flexibility in how you pay your premiums. You can pay premiums monthly, quarterly, semi-annually, annually, or even as lump sum. You can pay by electronic transfer or credit card. Some premium modes can be payable by check.
Insurance companies also waive premiums should you become totally disabled for a period longer than 90 days, and for so long as you remain totally disabled. After all, it doesn’t make any sense to keep paying for your insurance when it’s also paying you.
Other Features
This plan that we are featuring from one of our disability carriers also offers many other benefits. This includes presumptive disability should you lost the total use of both hands/feet, loss of sight in both eyes or hearing in both ears, or the inability to speak. The elimination period for this type of loss is waived until the loss ends.
You can also access rehabilitation benefits for an approved rehabilitation program. These benefits will be subject to mutual agreement.
If you should die while receiving disability payments, a survivorship benefit is payable equal to 3X the monthly payable disability benefit at the time of your death.
Marijuana Business Owner Disability Insurance through Marcan Insurance
Every marijuana business owner knows the challenges they face as business owners. Most insurers will decline disability insurance to these entrepreneurs, let alone provide adequate coverage plans for high income earners.
The agents at Marcan Insurance have access to 10 of the best disability insurance companies in the industry.
Interested in a disability insurance quote with absolutely no strings attached? Call Marcan Insurance at (888) 987-8447 today.
