Business overhead expense
From Ask in Wiki
Business overhead expense (BOE) disability insurance pays the insured’s business overhead expenses if he or she becomes disabled. A BOE policy pays a monthly benefit based on actual expenses, not anticipated profits. It can be effective for any business or practice that relies on a small number of people (or one person) to produce revenue.
[edit]
Coverage
The following business overhead expenses are typically covered by a BOE disability policy:
- Rent or Mortgage Payments
- Employee Salaries and Benefits
- Utility Bills
- Property Taxes
- Accounting Fees, Legal Fees, and Professional Dues
- Business Insurance Premiums
- Maintenance and Janitorial Services
- Depreciation
- Interest on Business Debts
- Office Supplies
- Other Fixed Expenses that are Ordinary, Necessary, and Tax Deductible
Some policies also cover the salary of a temporary employee hired to do the duties of the disabled. Income taxes, the cost of inventory, and the cost of furniture are some expenses that are not covered.
[edit]
Characteristics
- Benefit Periods BOE insurance policies have short benefit periods that do not usually exceed two years.
- Maximum Benefits BOE insurance policies offer a maximum monthly benefit, but only pay actual overhead expenses if they are less than that maximum benefit. With some insurers, any unused benefit can be applied to increase future monthly maximums or to extend the benefit period.
- Taxation DOE insurance benefits are subject to income tax, but the premiums are tax deductible as a business expense.
- Rates BOE insurance rates are based on the insured's age (at time of purchase), occupation, and health status. Once a BOE policy is owned, coverage can be increased without providing evidence of medical insurability.
[edit]
