Are you a business owner?  Do you have fixed expenses that you would still need to pay if you were too sick or hurt to work in your business or practice?  A business overhead expense disability insurance is properly matched to meet the specific short term needs of a business owner for when they are disabled.

It is not recommended to rely on an individual disability insurance policy to pay for business expenses while disabled.  For one, the elimination period on the individual disability insurance policy is typically 90 days, which means that the first check arrives around the 120th day.  This can be too long for a business to be able to continue through the owner’s disability.  Also, since individual disability insurance is commonly setup to pay for as long as “to age 67”, it really is not a benefit period that is well matched to the short term needs of a business.  If a business owner is out for 20 years, the business is not likely to continue.  This type of coverage is meant to keep the business running for 6 months, 12 months, 24 months, etc.

A business overhead disability insurance policy could be owned in conjunction with your individual disability insurance policy.  The benefit from the individual policy can then be used for expenses that are related to home life (mortgage, food, children, etc.).  The benefit from the business overhead expense disability insurance policy is commonly paid on a reimbursement basis to pay rent, utilities, some payroll, and other business expenses.  A typical benefit period for a business policy is only 12 months.  This shorter benefit period also means that the policy, on a “per $1000 of base benefit” basis, costs less than an individual policy.  Think about matching the insurance product to the specific problem at hand.

 

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