BOE, LTD, or Key-Man for Small Biz Owner

[DHK]

Well, if he has health issues, he might not qualify for either one.

According to post #6 - "not that many employees", but there are probably a few, then?

IMO, ALL business owners have higher amounts of stress in growing their business. They worry about growing revenues and profits, employee issues, growing market shares, etc.

Business owners deal with a great deal of stress, and that's why I think they are more prone to other health issues - such as heart attack, stroke & cancer.

As I said earlier, insurance planning is more an art than science. When I talk about business owner stress, I usually get nods of agreement... and they buy.

Sell them what they want and help them to make good decisions on appropriate coverage.

dgoldenz... I'm curious - what is the #1 cause of disability that isn't covered by a CI policy? If you're thinking of an accident, then I completely agree. I don't know of any policy that covers mental illnesses (such as depression), otherwise, I would recommend it.

 

[Justin Bilyj]

The guy is strong for 42 very healthy, I do is health insurance. Funny, this case seems challenging. Its not a cut and dry income m percentage.
There's overhead for keeping his business open, warehouse, vans, equipment, wages etc.
Theres also the fact that this man is mostly a one man wrecking crew, so if is out of the picture his replacement cost would be higher than a BOE, or ltd plan. Which is why I think something along the lines of having a keyman policy, but its hard to figure out his replacement cost because he cant just hire a guy to sell, train, manage, do the books etc. If he did 60k don't cover it. How many multiples of income do you recommend for a key man? 2.5-3?
I wish this guy didnt buy out his partner, it woulda been easier to do a buy-sell for his worth of the company!

 

[VolAgent]

Answer this question and you will get some guidance on the BOE and Key-man or even a buy out.

If he got hurt tomorrow and the doctor said he could never work again but you had something in place to replace his income and maintain his lifestyle, what would he want to happen to the business?

 

[Justin Bilyj]

you have been reading my mind, I was thinking the same thing, what does he want to do with it, hire a replacement, or sell his business.
If he sold his business, what type of policy would that be, and lone buy sell? It would have to be higher than a replacement I would imagine.
Lloyds of London are the only ones that will do a single buy sell.

 

[VolAgent]

you have been reading my mind, I was thinking the same thing, what does he want to do with it, hire a replacement, or sell his business.
If he sold his business, what type of policy would that be, and lone buy sell? It would have to be higher than a replacement I would imagine.
Lloyds of London are the only ones that will do a single buy sell.

Mass also offers buy/sell policies. They don't really advertise it, but they have it.

 

[dgoldenz]

dgoldenz... I'm curious - what is the #1 cause of disability that isn't covered by a CI policy? If you're thinking of an accident, then I completely agree. I don't know of any policy that covers mental illnesses (such as depression), otherwise, I would recommend it.

Musculoskeletal/connective tissue disease/disorders, usually in the form of chronic back pain, which is ~25-28% of all DI claims. Accidents only account for about 10% of all DI claims. All DI policies on the individual market from major carriers cover mental illness, though some are limited to 24 months. Guardian/Standard/MetLife/Principal all have unlimited mental/nervous coverage on their DI policies for most occupations.

Standard's BOE policy covers the replacement cost in full for a key person, but the max benefit period is 24 months like most BOE policies.

 

[Justin Bilyj]

Musculoskeletal/connective tissue disease/disorders, usually in the form of chronic back pain, which is ~25-28% of all DI claims. Accidents only account for about 10% of all DI claims. All DI policies on the individual market from major carriers cover mental illness, though some are limited to 24 months. Guardian/Standard/MetLife/Principal all have unlimited mental/nervous coverage on their DI policies for most occupations.

Standard's BOE policy covers the replacement cost in full for a key person, but the max benefit period is 24 months like most BOE policies.

Ohio National has the same key man benefit for their BOE.

 

[dgoldenz]

Ohio National has the same key man benefit for their BOE.

They won't let me sell without face-to-face interaction though, so screw them...

 

[Justin Bilyj]

You selling di over the phone? Please do tell. Do u primarily cold call Pete?

 

[dgoldenz]

I sell everything over the phone....have probably met less than 2% of my clients in person. DI sales come from referrals and existing clients, I don't buy leads or cold call.