Reviewed September 2026.
If you are a freelancer, LLC owner, or solo practice, you usually do not get employer long-term disability (LTD) at hire. You shop an individual policy from carriers such as Guardian, Principal, MassMutual, Ameritas, or The Standard, and you prove income with tax returns and profit-and-loss statements. Start with Disability insurance basics, then size the benefit: How much disability coverage.
Employer vs individual product compare (if you still have a W-2 side job): Employer disability vs individual.
What underwriters ask self-employed applicants
| Item | Why it matters | What to gather |
|---|---|---|
| 2 years of tax returns (1040 + Schedule C or K-1) | Benefit limits track documented earned income | PDF returns, not only bank deposits |
| Recent P&L / 1099 summary | Confirms current run-rate if income is rising | Year-to-date spreadsheet matching deposits |
| Occupation class | Rates and definitions vary by job risk | Exact duties, not only job title |
| Business overhead needs | Separate BOE policies can cover rent/staff | Lease and payroll figures if shopping BOE |
Irregular revenue budgeting sits beside coverage: Budgeting for irregular income.
Definitions and riders to line up
- Own-occupation vs any-occupation wording for your specialty: Own vs any occupation.
- Elimination period (often 90 days): match to cash reserves.
- Benefit period (2 years, 5 years, to age 65/67).
- Residual / partial disability: pays when you return part-time at lower earnings.
- Future increase / benefit update options while healthy.
- State programs (CA SDI and others) are not a full private LTD substitute: State disability basics.
Worked sketch: designer earning $120,000 net
Casey is a self-employed product designer. Schedule C net profit averaged $120,000 over two years. Casey wants about 60% income replacement → roughly $6,000/month benefit.
| Quote lever | Casey’s pick (illustrative) | Monthly premium ballpark |
|---|---|---|
| Own-occ to age 65, 90-day wait, $6,000/mo | Primary quote | ~$180–$260/mo depending on age/class |
| Same with 180-day wait | Lower premium | Often 10–20% cheaper than 90-day |
| Cap at $4,000/mo | If budget is tight | Shrinks coverage; keep emergency cash larger |
Casey keeps 6 months of personal + business fixed costs in cash because the elimination period pays nothing. Casey does not cancel a needed individual policy just because a short client contract includes weak group LTD.
Shopping checklist
- Document 24 months of earned income before the first call.
- Get at least two carrier quotes through a broker who places multiple companies.
- Compare own-occ language, residual benefits, and mental-health limitations side by side.
- Align elimination period with real cash runway.
- Ask how a bad revenue year later affects in-force benefits and future increases.
- Separate business overhead expense coverage from personal LTD if rent/staff continue during disability.
Educational only. Not insurance or tax advice. Underwriting classes, caps, and state rules vary; confirm with a licensed agent and your tax professional.