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Consider overhead expense insurance

In today’s ever-changing world, can one more thing be added to our lives that can or will change our lives and our family’s lives forever? Well, maybe, maybe not, but let’s take a look into the lives of Bob, Mary and their two kids.

Bob is a local businessman who owns and runs his own business. Mary is his office manager. They are living their dream, everything they had planned and worked for. They got married while in college, planned for their careers and planned for their family. Their whole goal was to provide a needed service for the community, live and raise their kids in a nice home, and make a good living, the American Dream.

When Bob and Mary opened up their business, they had it all planned out. Being the conservative that he is, Bob called his friend who was also his insurance agent to get all of his ducks in a row. During their meeting they laid out their goals and needs. Health insurance for their employees, commercial liability for the business, workers comp, 401(k), life insurance on themselves and kids, fire insurance, auto insurance, equipment coverage, long term care insurance and disability insurance on himself. They took care of all this and felt very secure in what they had put in place.

Most people would say, “Wow! Bob and Mary have covered all their bases.” But have they? Let’s see.

Bob has a catastrophic health event that leaves him disabled for two years. No problem, Bob and Mary had everything covered and planned for, right?

Bob and Mary forgot one extremely important piece of the insurance puzzle: business overhead expense. Bob had covered his salary with disability insurance. This paid him 67 percent of his income, which was a good thing. But what about his business, his employees, his buildings, equipment, rent, taxes and insurance, all the monthly expenses that it takes to run and maintain his business? Without Bob, the business fails.

Fortunately, in Bob’s case he had some friends who stepped in and helped Mary keep the business going until Bob came back.

Let me give you the Top 10 reasons to look into business overhead expense insurance:

1. The premium is tax-deductible.

2. The taxable benefits are offset by tax-deductible business expenses.

3. It provides benefits for eligible business expenses not covered by an individual income protection policy.

4. The policy can keep the doors of the business open.

5. The premium is affordable.

6. A partial disability benefit is included with the policy at no additional expense.

7. The policy can prevent a forced sale or “fire sale.”

8. It provides a pure own occupation definition of disability.

9. A guaranteed conversion is built into the policy.

10. A guaranteed insurability option is available. Add this rider to provide additional coverage as your eligible business expenses increase.

I know that this is a lot of information, but think about it. Do you own your own business? Do you have a friend like Bob’s?

Kim Cummins, life and health specialist for Des Champs & Gregory Inc., specializes in individual life and health, and employee benefit plans. He can be reached at (941) 748-1812.

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