How to Keep Your Business Running When You Can’t Work
Running a small business is risky enough without the added uncertainty of what happens if you or a key employee can’t work due to illness or injury. Disability insurance provides a financial safety net, ensuring business operations continue and personal income remains stable. Without it, business owners may struggle to cover expenses, pay employees, or even keep the doors open.
Providing the right benefits is vital. We provide an expert group benefits analysis to compare plans and handle the research for you, ensuring your business gets the best value for free.
Need to protect your business immediately? Call us directly at (770) 755-1565 to speak with a licensed professional at The Annuity Expert, or let us help you compare small business disability quotes.
Business Overhead Expense (BOE) Insurance
Your personal disability policy pays you so you can pay your home mortgage. A Business Overhead Expense (BOE) policy pays the business, so you do not have to fire your employees or close your doors while you recover.
- What it Covers: If you are disabled, a BOE policy reimburses the company for fixed operating costs. This includes office rent, utility bills, equipment leases, property taxes, and employee salaries.
- What it Excludes: It does not pay your personal salary, and it does not cover the cost of inventory.
- The Tax Advantage: Unlike personal disability insurance, the premiums you pay for a BOE policy are generally 100% tax-deductible as a standard business expense.
Key Person Disability Insurance
What happens if your top revenue generator—like a lead software developer, a top-tier salesperson, or a specialized executive—suffers a severe, long-term injury?
Key Person disability insurance protects the business by covering financial losses if a vital employee becomes disabled. It pays the business a direct monthly cash benefit to offset that massive loss in revenue. The company can use these tax-free funds to keep the business afloat or use the cash to recruit, hire, and train a specialized replacement.
Disability Buy-Out Insurance for Partnerships
If you have a business partner, you must have a funded Buy-Sell Agreement. What happens if your partner suffers a permanent, catastrophic stroke and can never return to work?
- The Problem: You are suddenly doing 100% of the work, but you are still legally required to pay your disabled partner 50% of the profits. Worse, you might end up in business with their spouse.
- The Solution: A Disability Buy-Out policy is strictly designed to fund your Buy-Sell Agreement.
- The Payout: If a partner is permanently disabled, the policy pays a massive lump sum (or scheduled installments) to the healthy partner. This provides the exact cash needed to cleanly and legally buy out the disabled partner’s shares and ensure a smooth business transition.
Get a Free Quote on Small Business Disability Insurance
Protect your income and business from unexpected financial risks. The Annuity Expert specializes in building robust protection packages for small business owners and partnerships. Let us do the heavy lifting. We will analyze your company’s cash flow, evaluate your overhead risks, and help you shop, compare, and buy the exact policies you need to bulletproof your business.
Call us directly at (770) 755-1565 to speak with a commercial protection specialist, or let us help you compare your custom disability quotes and secure your life’s work today.
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Questions From Our Readers
Is disability insurance deductible for an S Corp?
The good news is that an S Corporation can deduct individual disability income insurance premiums.
Is disability insurance pre or post-tax?
For individual long-term disability insurance, you would pay the premiums using after-tax income, which results in tax-free replacement or benefit income.
Can an LLC deduct life insurance premiums?
Can LLCs deduct life insurance premiums on their taxes? Even though the IRS allows LLCs to deduct most insurance premiums as a business expense, life insurance premiums do not qualify for this deduction.