Business Owner Overhead Expense Insurance

Business owners have a tremendous opportunity to reap significant rewards from a venture in which they have invested heavily. But it is not without substantial risk, the biggest of which is the loss of their ability to generate an income due to a disability. Some business owners understand the risk and have taken the essential step of obtaining disability income insurance. But would they also have enough income to pay the expenses to keep their business running during a period of disability?

A business that can only sustain Itself at the hands of one or two key people can be vulnerable to significant financial hardships should they become disabled and unable to contribute as needed. In many cases, if a business owner intends to eventually return to an ongoing business, having overhead expense protection is one of the only ways to ensure it happens.

A Permanent Business Needs a Permanent Solution

Many business owners invest a significant amount of their time and money into establishing their businesses. With so much at stake, it doesn’t make sense to address one of the most significant risks you face without a cost-efficient, permanent solution. With a BOE insurance policy, you can design coverage that will meet your particular needs, and your premium is locked in for as long as you own the coverage.

Your BOE coverage benefits begin when you become disabled based on the definition of your coverage. BOE is very similar to regular disability insurance and is typically structured along the following lines:

Benefit Period – BOE benefits are paid monthly for up to two years of coverage.

Maximum Benefit – Most BOE policies will cover qualified business expenses up to a maximum amount as established by the insurance carrier. If your actual costs are lower than the maximum amount, the balance accrues inside your coverage for future use if needed, which can extend the benefit period.

Taxes – Benefits paid through a BOE policy are generally taxable to the business; however, BOE insurance premiums are an allowable business tax deduction.

If you’re younger than 65, you have a one in seven chance of becoming disabled for six months or longer. A disability presents one of the most significant risks you face. Your business, and your ability to sustain it, even through a disability, is your most valuable asset, and it needs to be protected as such. When you look into a Business Overhead Expense policy, be sure and work with a disability income specialist experienced in working with business owners.