As a veterinarian who is a clinic owner, you’re focused on running your company and taking care of your clients. But there’s something else to think about; what would happen to your business if an accident or illness kept you from working for several months or even longer? You may want to consider purchasing disability overhead expense insurance.
Disability Insurance for Veterinarians
With disability insurance for your practice, even if the unexpected happens, you can keep the doors of your business open. It doesn’t replace you, but it does provide financial support so you can continue to pay fixed business expenses during your recovery. That helps you keep paying employee salaries, your rent/mortgage, insurance premiums, and more. Another important but overlooked benefit of overhead expense disability insurance for veterinarians is that it helps to retain the value of your business. If you ever reach a dire point where you have to sell the practice because you cannot come back to work, it gives you time to complete such a transaction.
Many veterinarians ask us how this insurance is handled from a tax perspective. While the benefits you may receive through overhead expense insurance are taxable, the premiums you pay for the policy are entirely tax-deductible. Also, your actual business expenses are still tax-deductible as well.
What expenses will be paid by overhead disability insurance? Some monthly operating costs that may qualify include building expenses such as rent or mortgage (interest and principal), property tax, equipment leasing costs, and security and maintenance. Utilities such as electricity and telephone may also qualify to be covered. Other monthly operating expenses that may be eligible for coverage could include
- Business-related loans
- Insurance premiums (property, malpractice, fire, etc.)
- Accounting, billing, and collection fees
- Subscriptions and membership dues
- Salary for your replacement
- Employee salaries
Overhead disability insurance for veterinarians can be critical because your practice may have monthly expenses of $10,000 to $50,000 a month or more! Without protection, your monthly bills could send your practice potentially into bankruptcy.
Some other benefits and features may be built-in or included in your policy. These different features include
- Carry forward
- Exchange privilege
- Legal/accounting fee benefit
- Presumptive disability benefit
- Death benefit
- Waiver of premium benefit.
The carry forward means that if your covered expenses are less than your policy’s maximum monthly benefit, you may carry forward unused benefits to a later month.
An exchange privilege could be useful if you want to exchange your policy for an individual disability income insurance policy. This feature is helpful if you ever leave your business but need personal protection because you are still working.
Legal/accounting fee benefit allows you to receive funds for legal and accounting expenses if you sell or close the business because of your disability. This benefit can be paid in addition to all other policy benefits.
Presumptive disability benefit means that regardless of your ability to work or earn an income, you can receive benefits if you have a qualifying injury/illness. Should you die while receiving benefits, payments may continue for three months or up to the maximum benefit available under the policy, helping ensure you meet your business obligations.
Finally, the waiver of premium benefit provides that you aren’t required to pay for your policy after its elimination period.
Aside from the features provided in your policy, you may take a step further to customize your coverage by adding a rider that allows you to increase your policy in the future if your expenses increase over time.
Don’t Wait To Protect Your Business
Here at TPVS, overhead disability insurance for veterinarians is what we do. We have helped thousands of veterinarians across the country with their insurance needs for over thirty years. To learn more about how we can meet your specific needs, sign up here to request a free quote.
This post offers general information that is NOT a substitute for professional advice regarding your insurance situation. This blog post was created and is owned by Total Planning Veterinary Services. Do not copy or use this post unless you have the written consent of Total Planning Veterinary Services.