Today's self-employed professional is faced with several problems when sickness or injury causes a Total Disability. Income may cease immediately but your office overhead expenses continue, putting an added drain on your resources. A MassMutual Business Overhead Expense insurance policy can help you protect your future by helping to keep your office open.
The premiums for this plan are tax-deductible as business expenses. During disability, benefits received are included in your gross income, but as the expenses covered are tax-deductible, no net tax liability exists.
Treloar and Heisel has selected this policy underwritten by Massachusetts Mutual Life Insurance Company with a discount negotiated specifically for professionals.
We encourage your thoughtful consideration of this important insurance policy.
This is a summary only of key featured, not a policy. If a policy is issued, the terms of the policy will control. In the event of a discrepancy, policy language will prevail.
Non-Cancelable and Guaranteed Renewable
As long as premiums are paid when due, your policy is renewable. Also premiums cannot be increased, benefits cannot be reduced and no restrictive riders can be added until the first premium due date after your 65th birthday.
Definition of Total Disability
Total Disability means that you are unable, due to injury or sickness, to perform the main duties of your regular occupation and are under a doctor's care. Note that the definition of total disability may vary by state.
Business Overhead Expenses
These are expenses that the insured was responsible for in running his/her business before becoming disabled. These expenses include but are not limited to:
2. Electricity, heat, water, laundry, phone and postage.
3. Employees salaries and benefits, including family members if employed by the business for a minimum of 12 months prior to the insured's disability, and serve an appropriate business function.
4. The greater of depreciation for federal tax purposes or scheduled principal payments on the business premises and/or equipment the insured owns and uses in running the business. At the beginning of a period of disability the insured must choose whether to claim depreciation or payment principal of debt.
5. Property taxes.
6. Accounting and legal fees.
7. Dues for professional associations; and
8. Other fixed expenses which are normal and customary to the operation of your practice.
Business Overhead Expenses do not include:
1. Cost of goods sold.
2. Additions to inventory.
3. Purchase cost of instrument or wares used in the insured's profession.
4. Fees or drawing accounts received by the insured's spouse or family member, if employed by the business for less than 12 months.
5. Any expense for which you were not regularly liable before the start of Total Disability.
6. Revenue produced by other employees with occupations similar to the insured's.
Partial Disability Rider*
This rider provides a disability benefit if the insured, while still disabled, is able to return to work at his/her regular occupation but in a reduced capacity. This is available at an additional cost.
The insured will be considered partially disabled when he/she:
• is suffering from a current disability
• is working at his/her regular occupation
• can do some but not all of the main duties of his/her occupation or can work at his/her occupation no more than 80% of the hours worked before becoming disabled
• is under a doctor's care
If the insured is partially disabled, the insurer will pay 100% of the covered overhead expenses that exceed the gross income of the business, up to a maximum of the total monthly benefit.
30, 60, or 90-day waiting periods are available.
You can choose total benefits equal to 12, 18 or 24 times the monthly benefit.
Accumulation of Benefits
When expenses for any month of total disability are less than the monthly benefit, the unused portion of benefit may be carried forward and used to reimburse expenses in a later month when the expenses exceed the monthly benefit. This may extend the benefit period.
Waiver of Premiums*
After the insured has been totally disabled (or partially disabled if the Partial disability rider has been purchased) for the waiting period, MassMutual will waive premium payments for as long as the insured remains disabled.
Future Insurability Option Rider*
This rider allows the insured to increase the amount of monthly Business Overhead Expense coverage as his/her business expenses increase. At issue, a "pool" amount is chosen which will be used during option periods to purchase new BOE coverage. Increases using this rider require only financial underwriting.
Other Included Benefits*
• Survivor Benefit
• Recurrent Disclosure
• Presumptive Disability
List the normal and customary fixed, recurring monthly expenses of the Business/Practice for which you are liable. In the event of shared ownership, include only your share of the average monthly expense.
Any expense which covers a period of time greater than one month should be prorated monthly over the period it covers.
Depreciation of owned equipment & premises
Mortgage interest or rent
Dues for professional associations
Business/Professional insurance premiums
Other fixed overhead expenses
*Do not include wages, fees or other compensation to yourself, any member of
your family, any member of your profession or occupation employed by or
working with you, or any person employed to perform your duties.