There are many ways to get into business or to expand the business you are in. One of the quickest ways is to get a Business Loan. Many times a banking institution or a 3rd party lender may require that you have Disability Insurance to protect you from defaulting on a loan if a disabling injury or illness were to occur. Business Loan Protection can pick up your payments where you left off ensuring your credit and your business stay intact while you are recovering. If you never recover then you can rest easy knowing that your loan will be satisfied even if you never continue to work in that business again.
Every business has some sort of overhead expenses. This could include a mortgage or lease payment, employee salaries and benefits, short-term equipment loans, insurance premiums, and much more. If you became disabled, how would you pay your employees? And for how long? Could your business stay in the space it's in? Would a bank be willing to loan you any money if you were disabled? These are questions business owners face in the wake of a disabling injury or illness. Business Overhead Expense Replacement (BOE) insurance can help cover those expenses. BOE is designed to buy you TIME. Time to determine if you will be able to recover and return to work, ensuring your employees are paid and bills are managed so the business can continue to operate when you come back. In the worst cases, it buys you time to develop an exit strategy so you can find a suitable buyer for your business or assets at fair market value.
When partners enter into business together, it is a good idea to have a Buy/Sell Agreement established. This agreement will identify what happens to an owner's share of the business if departure is necessary and at what terms the sale of those shares take place. This agreement will typically establish guidelines around Death, Disability, Disagreement, Divorce, and a Desired Exit. The agreement itself is designed to determine when an exit by an owner will take place and how the valuation of the shares are calculated so a fair transaction takes place. What it does not address is how the transaction is funded. Of all the "D's", Disability is by far the most difficult to deal with. When one of the owners becomes sick or injured two things become of concern:
The use of disability insurance will provide a funding mechanism that pays for the buy-out without causing the other owners to come up with personal cash and without forcing the business to dip into cash-flow. The decision as to whether or not the owner is disabled is now transferred to the insurance company so the owners don't have to determine this for themselves, avoiding any conflict or lawsuits.