Do you know that just like a life insurance, a business overhead insurance plan can offer you a good investment and financial security in the future? Seldom do people realise that apart from a life insurance plan they have added options for augmenting their financial resources in case unforeseen events occur, especially when they need to run their business even in the event of injuries or sickness.
BT understands the value of your business and the overhead expenses you need to maintain for maintaining its operation. That is why it offers a business overhead expense insurance plan as a form of protection in case you are not able to carry out your business in full capacity due to injury, sickness or any other impediment as a result of unforeseen eventualities. Business overheads insurance serves as a financial source for your business to survive in case you are temporarily disabled due to an injury or illness. BT Business Overheads is designed to reimburse the expenses incurred by its policy holders whenever the insured business owner becomes disabled. A business overhead expenses policy is different to personal disability insurance because it pays a shorter benefit period of usually one to two years depending on the policy chosen.
Why Purchase Business Overheads Expense Insurance?
If you want to have more security in terms of your financial expenses to sustain overhead costs in the regular operation of your business, a wise option is to get BT’s business overhead expenses insurance. In case you are struck by illness, injury or incapacity to manage your business, you can be assured that you have sufficient financial resources to sustain your business operation regardless of your ability to personally manage it. This will generally unburden your family and loved ones from looking for sufficient funds to pay for the overhead expenses incurred in running your business in addition to your medical expenses. This type of insurance can be related to any other life insurance as a form of investment necessary to prepare for unpredicted eventualities.
Expenses Eligible for Business Overheads Insurance
Not all business expenses are covered by business overhead expenses insurance. Eligible expenses are stipulated in the policy and should fall into the given categories for you to be indemnified or to make a qualified claim. It is important that you look into the specific expense provisions so that you will know if you can fully benefit from BT’s business overhead expenses insurance.
Generally, eligible business overhead expenses include employee salaries, employment taxes, employee benefit costs, rent expenses for property and equipment used in the course of business, principal and interest on mortgages, utilities, legal fees, accounting fees, business insurance expenses, interest on borrowings, office supplies and property taxes. Business overhead expenses insurance does not cover the salaries and wages of temporary employees. Other costs that are usually not included in business overhead insurance are income taxes, the cost of inventory and the cost of furniture.
Features of a Business Overhead Expense Insurance Policy
Business overhead expenses insurance has a shorter benefit period compared to a regular life insurance plan. It usually covers expenses of a business entity to a maximum of two years in the event that the business owner is unable to undertake business due to factors like illness or injury. This insurance plan has shorter elimination or waiting periods which take 30, 60 or 90 days. It offers maximum monthly benefits but only reimburses actual overhead expenses incurred by the business during the disability of the insured business owner. When the actual expenses are less than the maximum, the payment or reimbursement applied is up to the extent of the actual expenses only.
On the other hand, if the actual expense is more than the maximum benefit offered by the business overhead insurance, the ceiling amount provided by the insurance policy is the amount of your reimbursement. In some cases, insurers treat any unused benefit to increase your future monthly maximum benefits or to extend the benefit period. Business overhead expenses insurance benefits are subject to income tax but the premiums you pay are tax deductible and considered a business expense. The insurance rates vary and based on the time of purchase, occupation and health status of the business owner.
Considerations Regarding Business Overhead Expense Insurance
The insurance plan takes effect once the business owner becomes disabled due to illness or injury therefore resulting in their inability to perform the usual business transactions. During the time of disability, the business entity is limited when it comes to operations and other income generating activities but business expenses continue to accumulate.
Availing of insurance reimbursement or benefits is only restricted to the overhead expenses incurred during the time of disability. And to receive reimbursement from your business overhead expense insurance, you must satisfy the elimination periods of either 30, 60 or 90 days as stipulated in your insurance policy. With these considerations, you need to carefully look into your options and make sure that you can get the maximum benefit from your business overhead insurance. If you are highly vulnerable to risks, then you can start contemplating your options for getting business overhead expenses insurance promptly.
Business Overhead Expenses Insurance vs. Personal Disability Plans
Many of us perceive business overhead expenses insurance similar to personal disability plans. Both of these life insurance policies consider illness or injury as disabilities. They are also similar when it comes to elimination or waiting periods. The difference between the two is the benefit period that they offer. If a business owner is permanently disabled, he or she can purchase a personal disability plan that can pay benefits up to the age of 65. Business overheads insurance on the other hand can only cover business expenses for up to two years.