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Many people ask, “What is disability income insurance?”  One myth about disability income insurance is that it is only for rare, catastrophic accidents.  In reality, many rely on these policies to cover income lost due to relatively common conditions, such as heart disease and arthritis.


Individual Disability Income Insurance

  • Individual Disability Income policies replace a portion of your income if you are too sick or injured to work. 

  • It can supplement any coverage that you might have through your employer.

  • You pay for this with after-tax dollars and any benefits you receive are tax free. 

  • High-earning individuals can have more income protection than what is offered by an employer.

  • The policies are portable and belong to you even if you change jobs.


Disability Insurance for Business Owners

  • For small business owners, different types of disability insurance can protect your business if you can’t work because of an injury or illness.

  • Several options can help to keep your business running by continuing to meet daily expenses including employees’ salaries

  • Funding to buy out a partner who can’t work due to illness or injury is also offered.



Many small business owners and entrepreneurs understand the importance of protecting their own personal income but neglect to insure proper care of their business when a long term disability or sickness occurs. Sadly, many successful businesses fail when the CEO cannot work because of a long term disability.  This happens because their business overhead costs accumulate past a point of viability.  The solution to this would be to insure those costs with a Business Overhead Expense Disability Income insurance policy.


After a determined waiting period of being totally disabled, monthly business operating expenses can be reimbursed by the Overhead Expense policy. Typical covered expenses are:


  • Rent

  • Interest payments on outstanding eligible business debts

  • Utilities (heat, water, telephone, electricity, etc.)

  • Employees’ salaries and payroll taxes

  • Postage and stationery

  • Equipment maintenance

  • Rental, lease or depreciation of office equipment

  • Monthly average of taxes on the premises

  • Insurance premiums for workers’ compensation, employee medical plans, employee taxes, general liability

  • Accounting Fees

  • Professional memberships and/or subscription dues


Policies pay a monthly benefit based on actual expenses, not anticipated profits.  They are designed for businesses that rely on a small number of people (or one person) to produce revenue.


The benefit periods do not usually exceed 2 years.


The elimination periods are either 30, 60, or 90 days.


The insurance benefits are reportable as income and the premiums are tax deductible as a business expense.


A Business Overhead Expense Disability Policy should be in every small business owner’s

insurance portfolio.

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