Looking for Business Overhead Expense insurance with cash surrender or ROP pre-death

[Daniel85]

I am looking for a BOE insurance with a return of premium for cash surrender or a return of premium after a certain number of years. It need not be the full 100% of premiums.

 

[Tahoe Ray]

I am looking for a BOE insurance with a return of premium for cash surrender or a return of premium after a certain number of years. It need not be the full 100% of premiums.

Illinois Mutual

 

[Daniel85]

Illinois Mutual

I looked into them, but they don't offer ROP until age 65. Insured is 32. Are you aware of any that offer ROP or even cash surrender?

 

[DHK]

BOE is tax-deductible. The IRS offers a partial ROP on that premium every year. (Actually, if you look at the business's total tax liability, it's a $ for $ reduction of that tax liability.)

Why? Because the benefits are taxable... but are offset because it only is to be used for tax-deductible expenses.

https://finsecurity.com/finsecurity/pdfs/compliance/2b3-05.pdf

 

[Daniel85]

BOE is tax-deductible. The IRS offers a partial ROP on that premium every year. (Actually, if you look at the business's total tax liability, it's a $ for $ reduction of that tax liability.)

Why? Because the benefits are taxable... but are offset because it only is to be used for tax-deductible expenses.

https://finsecurity.com/finsecurity/pdfs/compliance/2b3-05.pdf

DHK, I'm not sure I'm following. I understand that there is a today business deduction on income for the BOE insurance, but that any returned premiums would be counted as income when returned. Very much okay with that.

 

[DHK]

I'm saying to forget about ROP on BOE. The IRS simulates that for you... every year.

 

[Daniel85]

Aside from Illinois Mutual are you aware of any others that have a BOE with a ROP rider?

 

[DHK]

Why would an insurance company offer ROP on BOE? It makes no sense to me. All it does is charges up to 40% more... so you can deduct the higher premium from the IRS... so you can get back a taxable lump-sum in the future.

But if it IS available, I'm sure that Petersen's would be the best bet... but they don't even offer/explain it on their proprietary brochure.

Business Disability Insurance Plan - Overhead Expense

https://www.piu.org/wp-content/uploads/2014/05/Business-Overhead-Expense-11-15-2015.pdf

 

[DHK]

But for other carriers, I found this (I assume agent site):
https://businessoverheadexpense.com/

You might want to check out these carriers:

A+ Rated Companies that offer business overhead expense insurance:

• Assurity
• Guardian
• The Hartford
• MassMutual
• MetLife
• Mutual Of Omaha
• Ohio National
• Principal
• Standard
• Union Central

 

[Tahoe Ray]

I looked into them, but they don't offer ROP until age 65. Insured is 32. Are you aware of any that offer ROP or even cash surrender?

I wouldn't buy the ROP at all but no, not on BOE before "retirement age".