Find information here about
- Business Overhead Expense Disability Insurance
- Buy/Sell Life/Disability Insurance
- Key Person Life/Disability Insurance
- Partner Buy-Out Disability Insurance
- Group Benefits for a Practice/Business
- Guaranteed Standard Issue (Multi-Life) Disability Insurance
Request information for any of the above mentioned items:
Business Overhead Expense Insurance
Running a business of course includes paying for the “overhead” to keep the lights on. This can include office rent, utilities, payroll, office supplies, and on and on. Having the primary business owner out sick or hurt for even a short period of time can introduce long term issues relative to operations. It is important to have a mechanism in place that can allow for payment or reimbursement for business expenses to keep things running smoothly. Some overhead insurance policies will even allow for reimbursement for a replacement professional while the insured is out. Point being, it is best as a business owner to consider how the business would continue if they were out sick or hurt. The key is that an individual disability insurance policy should NOT be used to cover ordinary business expenses. The individual policy is meant to replace the take home income of the business owner.
Business overhead policies are commonly structured to pay benefits after only 30 days (or less). Individual policies typically pay after 90 days of disability. The idea is that the business needs the money as soon as possible if the business owner (physician, dentist, professional, etc) becomes disabled.
Insuring Income works with all of the top disability insurance carriers and we find that the carriers that offer the best individual disability policies also have the most favorable overhead expense policies. We recommend requesting quotes for overhead and individual coverage at the same time. If you have individual coverage already we would recommend reviewing options from the same company. We make sure that all policies are as efficient as possible from a pricing standpoint.
Buy/Sell agreement that includes planning for disability and a Disability Insurance Policy to fund the disabling event
As business partners go about planning for today and tomorrow, they will come upon succession planning questions. Succession planning really has to do with the plans for what would happen to the business if it is sold at some day (everyone would like to think that there will be ready and able buyers there to make a fair offer or to come up to what the owner wants, when the time is right). More times than not things do not turn out to work exactly as we hope. This is why we plan after all.
Since it is possible a key partner of a business could become incapacitated and unable to perform the duties of their job, we must plan. An insurance policy can be setup to trigger if a partner/owner meets the definition of disability in a previously agreed upon contract for which is managed by an insurance company. The triggering event can mean that a lump sum comes in to “buyout” the disabled partner (possibly when the disabled individual needs money to care for themselves). The healthy and working partner could then make accommodations to replace the disabled partner/owner and the contentious process of trying to come to a deal after disability strikes is circumvented. Business is able to continue and the partners are able to move forward without it being something that by itself could have destroyed the business. Had the insurance contract not been in place the disabled owner could demand distributions and this might not be the best thing for ongoing operations. Insurance is a tool in the toolbox. Working with Insuring Income can mean that an insurance professional is able to contemplate the potential problems that can impact a business and the proper tool can be used to address a specific “what if”. In this case, the buy/sell agreement that has language in it to deal with disability is what made the difference. A buy/sell that included life insurance only would not have solved the problem.
We recommend including both life and disability insurance contracts in any buy/sell agreement since it provides liquid money and it takes the onus of deciding “if” disabled and “what” happens and puts it entirely on a 3rd party insurer that will follow the language of the pre-designed contract.
Key Person Disability Insurance
For anyone that has a business and an employee that they feel like they literally could not live without…please stop and think about what would happen to the business if that individual were to become too sick or hurt to work. It can strike at the worst time and can have dire impacts on business continuity.
Key Person Disability Insurance does something that is quite simple to understand:
- Key Person is identified
- Agreement is put in place to identify a plan of action for IF employee X, Y, or Z becomes disabled
- A disability insurance policy is put in place to pre-define what a disability is and what happens in the event of disability of employee X, Y, or Z
- Triggering event in the disability policy is met
- The business receives payment either in a lump sum or monthly payments (or both) while the “key person” is disabled
- The company is then able to use those funds to hire a replacement or do whatever they see fit within the daily ongoings of the business
Disaster averted and we hope the key person gets well!
Group insurance benefits for employees
Insuring Income can work with your medical or dental practice, or any other type of business to quote, review, and implement high quality benefit programs to attract and retain great workers. We can also work with companies to design programs that help them to meet minimal requirements as determined by the state or federal governments.
- Health Insurance
- Dental Insurance
- Group Disability Insurance
- Group Life Insurance
- Guarantee Standard Issue (GSI) Disability Insurance (employee or employer paid)
- Guarantee Issue Life Insurance
Guaranteed Standard Issue (GSI) disability insurance programs
Insuring Income is a provider of high quality guaranteed standard issue disability insurance programs for medical residents and fellows.
Guaranteed Standard Issue (GSI) programs are setup with top own occupation disability insurance carriers and it allows covered employees to elect to obtain an individual disability insurance policy that can protect them through their career for if a period of sickness or injury were to prevent them from working.
GSI programs are offered by the same carriers that are quoted and purchased in the individual specialty specific (own occupation) disability marketplace.
Plans will typically include $5,000 of monthly benefit for medical residents with the ability to increase coverage to as much as $17,000 monthly in future years (under the terms of the future increase option riders offered by the GSI carriers). Plans would also include a Residual rider and Cost of Living in some cases. Plans can be designed by a human resources or benefit department or by GME program’s benefit administrators.
Convenience – Busy Medical Residents and Fellows are able to obtain the same plan as they would normally look to obtain but because they are employed at Hospital XYZ (which has the GSI deal in place), they can skip the nurse visit and underwriting and get what they want.
Insurability – Since the plans are “guaranteed standard issue”, any insured that meets the necessary requirements (we can help with understanding options for fine print) can obtain a policy. Without a GSI program a health condition or event from the past could have led to a decline if applying alone. In a traditional non-GSI insurance underwriting process if the underwriter saw reason to believe that there was risk from prior conditions they could refuse to issue coverage (declined application). GSI programs could ultimately mean that someone that could not obtain coverage now has a policy. That person could go on to file a claim and receive hundreds of thousands of dollars of claims payments (claims are managed on a case by case basis by the underwriting insurance company. Insuring Income and the agents at Insuring Income are not claims managers at any insurance company).
Benefit to attract talent – for the reasons mentioned above we see that some physicians will go as far to choose one residency program over another. Benefits are very important and the person that knows they do not have perfect health see this as their reality – they need to be on the hunt to find unique ways to insure their income and their lives.