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Overhead disability insurance – do I need it as a business owner?


My client made a fantastic decision and I'm proud of them.  Here’s how it went down.

We brought on a new dental clinic owner who needed an up-to-date disability insurance policy that truly protected their income which had grown significantly.

During the process, we discovered that although we had put protection in place that provided this dentist with personal income in the event of disability, there was still a whole business with expenses and bills to pay. So we presented the idea of an Overhead Disability Policy.

Disability insurance is an essential tool for protecting one's income and financial well-being in the event of an accident or illness that prevents them from working. However, many people do not realize that traditional disability insurance policies only cover personal income and not the expenses of running a business or practice. This is where overhead disability insurance comes in.

Overhead disability insurance is a policy that provides coverage for the business expenses that continue to accrue in the event that the owner or a key employee is disabled and unable to work. These expenses can include rent or lease payments, utilities, employee salaries, and other overhead costs that are necessary to keep the business running.

In this particular case, the policy would provide $50,000 per month of coverage for a 12-month benefit period.

One of the key benefits of overhead disability insurance is that it can help provide peace of mind for business owners who rely on their income to cover not only their personal expenses but also the expenses of running their business. Without this coverage, a disability could lead to financial ruin for both the individual and the business they have worked so hard to build.

Initially, the client expressed interest, but when thinking about the premiums and the actual chance of disability, they began to feel it wasn't needed.

But then... the client referred to how expensive travel can be, considering they have to close the clinic anytime they are away in addition to paying for their travel. And that was the opportunity our team needed to communicate how important this product is to their situation.

The client's decision to invest in an overhead disability policy ultimately protected not only their own personal income but also the livelihoods of their employees and the future of their business. Without this coverage, a disability could have led to significant financial strain on the business and its employees.

As a financial planner, I'm not selling products that are not suitable for people, but I am here to provide my expert advice on products that are both suitable and also help protect them in the future. In this case, there was a big problem if this client became disabled. There was $50,000 per month of expenses that would need to be paid. Much of which was salaries to members of this dentist’s team who they viewed as family.

In conclusion, overhead disability insurance is a crucial tool for business owners who rely on their income to support not only themselves but also their employees and their business. While the cost of premiums may seem like an added expense, the protection and peace of mind that this type of coverage can help provide, can be invaluable in the event of an unexpected disability. As always, it's important to consult with a trusted insurance professional to determine the best coverage options for your unique situation.

- Brandt Butt,

Associate Portfolio Manager/Investment Advisor, CIM®

Insurance Advisor with iA Private Wealth Insurance*

Insurance products are provided through iA Private Wealth Insurance, which is a trade name of PPI Management Inc. Only products and services offered through iA Private Wealth Inc. are covered by the Canadian Investor Protection Fund.

Brandt is a Portfolio Manager/Investment Advisor and part of an award-winning team at Endeavour Wealth Management with iA Private Wealth. Brandt’s focus is working with incorporated physicians and dentists between the ages of 35-45 who are looking to set themselves up on the right financial path in hopes of reaching a point where they are choosing to work, instead of having to.

This information has been prepared by Brandt Butt who is a Investment Advisor/Portfolio Manager for iA Private Wealth Inc. and does not necessarily reflect the opinion of iA Private Wealth. The information contained in this newsletter comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained here in may not apply to all types of investors. The Investment Advisor/Portfolio Manager can open accounts only in the provinces in which they are registered.

iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates.


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