Small Business Owner Disability Insurance

It is common for us to meet a small business owner who would lose everything they have built if he or she was unable to work for even a small period of time. As a small business owner you need to take the subject of disability insurance very seriously. Everything you have now, and everything you hope to have in the future just may depend on your ability to get to work every day, and to grow and run your business.

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Only So Many Dollars Available, What Is Necessary?

If you had an unlimited budget, you could easily spend a small fortune on the various insurance products available for small business owners. We recommend starting with the vital disability insurance products, and as a risk increases or the budget allows, you can expand from there.

You need to protect your personal income, and you need to make sure that you will have a business to come back to after any period of long term disability. If you are your business, then an individual disability insurance policy and a professional overhead expense disability insurance policy are a must.

You and your family need to make sure that there is always an income stream coming in regardless of whether or not you are able to work. An individual disability insurance policy will make sure that happens.

You also need to make sure the bills are paid in the event you are unable to work at the place of business. A professional overhead expense policy will reimburse you for deductible overhead expenses paid during a period of long term disability at the office. The premiums you pay for this type of insurance are tax-deductible. It makes sure there is still a viable business to come back to after you recover from a period of disability.

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Protecting Your Employees

There are some states that require long term disability insurance benefits for all employees, however in most states it is not a requirement. We believe that it is important for you to protect the business first with an individual disability policy on yourself, and a professional overhead expense policy for the business. Once these two policies are in place, the next step may be to start protecting your key employees with long term disability benefits. You have the option of buying group long term disability on all employees, or purchasing individual policies on a select few key individuals.

A very common strategy used today is for the business to offer voluntary income protection benefits to their employees. The business endorses an insurance company, and the company will enroll any employee who wishes to participate in the disability protection. The employees pay for their own benefits, however they also receive a discount because of the company endorsement. This strategy doesn't cost any money to the business, and the employees receive high quality disability insurance at a discounted rate because of their company affiliation.

Business Loans

It is important for us to include a small section about small business loans. We receive too many quote requests from small business owners who only need the protection to guarantee a loan from a bank. They never tell us the quote request is for this reason, and we end up sending them the wrong type of policy. Guardian offers a policy called the “Business Reducing Term” which is used specifically for small business loans. It is inexpensive disability insurance which will pay the bank or lending institution during a claim, and allow you to use your personal disability insurance policy benefits to live on during a claim. If you are looking for long term disability income insurance to secure a loan, please make sure to mention you want “Business Reducing Term” in the quote request form.

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A Tax Advantage, too

Buy-Sell Planning

If you are involved in a partnership, you would also need to plan for your partners disability. Should you, or your partner, become permanently disabled to the point where you no longer are a value to the business, we can provide the funding to buy-out you, or your partner’s share of the business.

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