Story at-a-glance
- A disability can shut down your practice—even if your personal income is covered, your office expenses won’t be.
- BOE insurance keeps your practice afloat by covering rent, salaries, and other fixed costs during your disability.
- Individual BOE policies offer stronger protection than group plans, with higher benefits, stable premiums, and customizable terms.
- BOE benefits are taxable but premiums are deductible, making it a smart business expense.
- Protect your biggest career investment—your practice—with coverage tailored to your specific overhead and risk.
Any medical or dental practice that relies on one or two people to generate revenue is especially vulnerable to financial problems in the event of a disability. Disability income benefits are usually sufficient to replace a disabled practitioner’s income, but are typically insufficient when it comes to paying the ongoing expenses of the practice. For most disabled practitioners, if they have any hope of returning to an established practice, a business overhead expense insurance policy is the only way to ensure that it can happen.
A Permanent Practice Needs a Permanent Business Overhead Expense Solution
Yet, for too many practitioners, purchasing business overhead insurance is an after-thought, or it is purchased without regard for the quality of the coverage. For instance, many physicians and dentists purchase their BOE insurance through group plans, which typically don’t match the coverage available through individual overhead expense policies. While they may be less expensive than individual policies, group disability plans tend to cap the benefits available, and they offer less security due to the fact that the provisions of the plan can be changed at any time.
Next to your education, your solo practice is the biggest investment you will make in your career. With so much at stake, it doesn’t make sense to address your biggest risk with a temporary or insufficient solution. Only with an individual BOE policy can you design a protection plan tailored to your specific needs, and lock in the premium rate and benefits for as long as you own the policy.
Business Overhead vs. Disability Insurance
BOE insurance benefits are triggered by a disability just as with disability insurance; however, there are some key differences in the coverage:
- Benefit Periods: Typically, BOE benefits are payable for short periods of time, up to two years.
- Maximum Benefit: As with disability income insurance, BOE insurance pays a maximum monthly benefit but only to the extent needed to cover overhead expenses. If monthly overhead expenses are $20,000, and the maximum monthly benefit amount is $20,500, $500 is kept in the policy to be applied to increases in the monthly benefit or to extend the benefit period.
- Taxation: Unlike individual disability insurance which pays a tax-free benefit, the benefits from a BOE insurance policy are considered to be taxable, even if paid with after-tax dollars. However, BOE insurance premiums are usually tax deductible to the business.
For more than 20 years, Doctor Disability has specialized in offering high quality disability plans for medical professionals. Our experienced agents are highly trained to serve practitioners with particular attention to of their unique needs, priorities and preference. They are committed to working closely with you to design a disability solution tailored to your specific situation.
Ready to protect your future?
Get a personalized side-by-side policy comparison of the leading disability insurance companies from an independent insurance broker.
