Independent business owners may find it difficult to purchase disability insurance for two main reasons. Firstly, there are several medical criteria that have to be met, including an analysis of past medical history and a passing of a physical examination. In addition to the medical criteria, well-documented records of income must be provided to the insurer to satisfy the insurance company's earnings criteria. Many insurance companies are weary of insuring entrepreneurs and will not provide coverage unless the entrepreneur can provide proof of long-term earnings, such as evidence of corporate contracts.

This means that even if an entrepreneur wants – and can afford – to purchase disability insurance, he or she may not be able to, as Paul Lima discovered.

Paul's story I confess, until I became sick I considered myself 'self-insured' .. read Paul's story.

Lima, a freelance writer who works from home, hadn't purchased any type of insurance when he was diagnosed with "potential" Multiple Sclerosis a few years ago. The writer was sick for a prolonged period of time, during which he hired his wife and a typist-friend to assist him with his articles. Fortunately, he made a full recovery and has been trying to secure disability insurance ever since. Lima says that it has been virtually impossible.

"I've been trying to get disability insurance, but I've been told that I can't – not because of the possible MS, but because I am a freelance writer without long term contracts," Lima explained. He says he enjoys a steady stream of income and that it has increased substantially in the last decade, but without the long-term contracts with corporate client, the insurers will not agree to coverage.

Even if all the criteria are met, SOHOs (Small Office/Home Office), still have to struggle with the corporate cultures embedded within the insurance company mindset that has yet to identify and accept the legitimacy and professionalism that exists within small business operations.

"If a person goes on claim for earning their income from their home, there is no way that the insurance company can verify if their status of work has changed versus someone who goes to the office each and every day, " explains Bill Deacon, an expert in disability insurance.

Deacon says that the entrepreneur should look at it from the insurance company's perspective. "How does the insurance company know if this person is doing their job? The insurance company will want to be able to have physical evidence that this person is disabled on every claim. And, if the person never has to go out to do their job and can earn all their income without stepping out of their front door, the insurer will wonder if the person could be behind closed doors doing all their work and at the same time, saying that they're disabled."

If an entrepreneur can break through the obstacles and obtain disability insurance coverage, experts say that you ought to buy as much insurance as the company will allow. Tanti says that in most instances, individuals may be able to purchase a policy that covers up to 67% of their pre-disability earnings, depending on their age, gender, smoking patterns and income.

Definitions of "Disability"

Keeping costs down