Disability Income Insurance
Protect Your Business and its Obligations
Keep your business up and running with Overhead Expense Disability Insurance, Business Reducing Term, Disability Buy-Out Insurance, Voluntary Income, and a Qualified Sick Pay Plan.
Overhead Expense (OE) Disability Insurance*
- Provides reimbursement for the expenses of operating a business if you are disabled and cannot work.
- Expenses may include: rent or mortgage payments, water, electricity, telephone, or other fixed costs normal to the operation of the business.
Protect Your Business Obligations.
Consider the following scenarios:
- You want to borrow money for a business expansion.
- You recently purchased a business with an amount payable to the seller over a specified period of time.
- You may offer a guaranteed employment contract to employees -- guaranteed whether the employee dies or is totally disabled.
A Business Reducing Term* policy is specifically designed to fund financial obligations which require periodic payments expiring at a given time. Reducing Term insurance can insure against a disability preventing you from meeting such fixed payment obligations as:
- salary contract and contract performance guarantees,
- funding of medium term loans dependent upon the business talents of a key individual for their repayment, and
- purchase agreements
Best of all, it is in addition to any personal disability insurance you may already have or may choose to purchase in the future.
- What if one of the major players in your business was no longer able to come to work because of a sickness or injury?
- Disability Buy-Out Insurance is designed to provide the company’s owners with money to reimburse a disabled owner for his or her financial interest in the company.
- This money is available over and above any replacement income the owner or partner is receiving under a traditional individual disability income insurance contract.
Protect your Employee Benefits by offering employees the Voluntary Income Protection Program.
These days, benefit costs can dramatically affect profits and the ability to compete. You may need a plan to help meet a very real business need, yet costs you almost nothing.
Eligible employees can purchase individual non-cancelable and guaranteed renewable disability coverage and have premiums paid through a simple payroll deduction. Protection is provided to the employee and the business is protected from confronting the issue of whether to continue to pay a disabled employee, and at the same time, have to pay a replacement.
Qualified Sick Pay Plan Program
If you or one of your key employees became disabled, would you continue to pay their wages? Continue to take a business tax deduction? Continue to make FICA contributions?
If your immediate response was. “Of course I would,” you may be surprised to learn that the tax courts have ruled that unless you established a Qualified Sick Pay Plan (QSPP) before a disabling accidents or illness occurs, any “wages” paid to a disabled employee are not a business expense, and not tax-deductible.
In fact, only a firm with a Qualified Sick Pay Plan in place may continue to pay wages to a disabled employee or a shareholder-employee and deduct them as a necessary business expense (IRC 105, IRC 162). In addition, with a QSPP plan, FICA contributions can be limited to the first six months of benefit payments.
A simple agreement can set the company policy on sick pay benefits. By transferring the funding risk from your business to an insurance company, you can make small payments when everyone is healthy and working; and you can deduct the premium as a necessary business expense.
Berkshire Life can help your business establish a qualified sick pay program to provide the insurance needed to fund the plan.