BOE insurance: the ultimate business life preserverArticle added by Daniel Steenerson, CLU, ChFC, RHU on May 28, 2014
Daniel Steenerson

Daniel Steenerson, CLU, ChFC, RHU

San Diego, CA

Joined: October 15, 2013

Like most entrepreneurs, your clients aren’t just running a business — they’re fulfilling a lifetime goal. But what would happen to those dreams if they became disabled? Would their business be able to continue without them? Who would pay their employees’ salaries? Take care of the monthly bills? These costs don’t just go away when a business owner suffers a sudden and drastic loss of income due to a disability.

At the same time, since many disabilities are only partial or temporary, it doesn’t make much sense to sell a business right after the owner becomes disabled. But without a solid plan and the means to cover ongoing expenses — even for a short time — a business owner can quickly be left with few other options.

Below are three important reasons that every business owner should consider business overhead expense (BOE) insurance:
  • A life preserver to stay afloat: BOE insurance provides a life preserver to keep a business running, even when there isn’t enough income to meet some or all of its expenses. It covers overhead expenses that are ongoing during a total or partial disability, and it helps maintain the value of the business until the owner can decide what to do with it. Regardless of whether the business owner recovers from the disability, a BOE policy buys time to either recover and get back to the business, or sell while it’s profitable. And let’s face it, if one of your clients ultimately has to sell their business, they would much rather do it on their own terms than as a last minute act of desperation.

  • A great supplement to individual disability insurance: Some business owners’ salaries don’t reflect their true income. Because individual disability insurance policies require income verification, these business owners may have difficulty securing an adequate level of individual disability insurance protection. That’s when it’s especially helpful to have a BOE policy in place. The BOE covers salaries for the entire team, as well as many other overhead expenses.

  • Peace of mind for customers, creditors and employees: Without it, they could be forced to dig into personal funds or take on debt to meet their ongoing business expenses — or even shut down altogether. Business owners will be able to sleep better at night knowing their business can continue operating if they become disabled. Their customers, creditors and employees will rest easier, too.
Help your clients understand what’s at stake.

When a business is running on all cylinders and the money is flowing in, ongoing overhead expenses probably don’t get a lot of attention from most business owners. But it only takes an instant to change everything if a business owner suddenly suffers a disability. It’s important for your clients to know the numbers — what it costs to keep their doors open every month — so they can plainly see what’s at stake if they should become disabled.

Help clients protect their businesses and their financial security by showing them a powerful protection combination: individual disability insurance to protect their long-term earning power combined with business overhead expense insurance to ensure business as usual.
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