Businesses must continue to operate if an owner can’t work because of a disability
Small to medium-sized businesses are the backbone of the US economy – comprising 99% of all US businesses and almost 50% of all US employees.
There are many different types of income protection insurance for businesses and in most cases, combining policies will offer your clients the best coverage.
Some business disability insurance products are geared towards protecting the business and the business owner while others cover the business and its employees. For more information about protecting employees, visit Guaranteed Standard Issue and Guaranteed Medical Education.
Key Person Disability Insurance
Most companies have a key person or primary employee who is essential to the success of the business. A key person could be valuable because of their expertise and knowledge or education, for example a CPA or a doctor or dentist with private practice. It could be devastating to the business if this person could no longer work due to a disability. Key Person Disability Insurance provides crucial benefits to help a company move forward financially if a key person is no longer able to work.
Business Overhead Expense Disability Insurance
Business Overheard Expense (BOE) coverage protects the business by reimbursing most business expenses that come up if the business owner becomes disabled. Business expenses can include utilities, building lease, employee salaries, etc. A BOE policy will keep the lights on and keep the business running if the owner is unable to work due to injury, illness or accident.
This type of insurance will help a business owner protect his/her interest in a business or partnership in the event of a disabling accident, injury or illness. A funded policy will provide the financing necessary to buy or sell an interest in the business. Buy/Sell Expense Disability Insurance coverage can be determined by the business’ book value, market value or potential future earnings.
Individual/Group Supplement Disability Insurance
This type of insurance provides additional protection for individuals and groups already covered by employer-paid group Long-Term Disability (LTD) insurance. Supplemental disability insurance such as this is frequently written on executives or more senior employees to provide more coverage for higher earning employees of an organization.
Impaired Risk Disability Insurance
Impaired Risk coverage is a unique type of coverage that can be helpful for clients who have situations where traditional disability insurance coverage isn’t applicable. People with medical conditions (cancer, diabetes, high blood pressure, etc.), use tobacco products, have high risk occupations/hobbies are great candidates for Impaired Risk coverage. Do you have a client who is a pilot or sky diver? This is the perfect policy for them.
Loan Protection Insurance
Bank Loan Disability Insurance policies indemnify a business’ bank loans. This form of insurance can help repay loans if a borrow is unable to work because of a disability.