Expenses are similar to taxes they just keep rising. How does a business continue if something happens to the boss? Expenses don't stop and if some unforeseen accident or sickness is prolonged a business can be crippled. Business owners have the option to protect their personal income to keep the family afloat with disability insurance and Business Overhead insurance can do the same for business expenses. Because most advisers don't work in this area it's a commonly missed benefit when business planning. Business overhead protection works hand in hand with disability insurance and when a self-employed is insured properly and something happens they can be rest assured that all they have to do is focus on getting better as the business continues waiting for the return of the boss. It's not as simply as that but from experience I can say that the stress of how are expenses going to be paid factor becomes an non factor and attributes to a faster recovery.
Business overhead insurance points:
- Benefits are normally for one year but some associations have a 2 year benefit.
- Waiting periods are short, usually 30 days and can be 14 days.
- Premiums paid are tax deductible to the business.
- Benefits are taxable to the business.
- Cost example male 40 NS $15,000 per month benefit, 14 day wait is monthly $100.46. Included is a partial benefit and a 3 month death benefit.
Personally, when putting plans together I suggest the short waiting period on the business overhead and a longer waiting period on the disability benefit of 90 days. Going with the longer waiting period for the disability benefit saves money which helps towards paying for the business overhead. Business owners whom are incorporated have the owner and the beneficiary set up in the name of the corporation. The benefit is eligible for any self employed incorporated or not and is excellent for partnerships. These benefits are not as easy to get and full financial reporting is required.
Here we go again increasing business expenses but this additional expense is well worth the cost.