Every responsible financial advisor has been lectured on individual disability income insurance, and the good ones have lectured their clients on IDI. We all know the statistics, the traumatic stories, and the ultimate need to protect your biggest asset—an ability to earn an income. However, business owners often have an asset just as great if not greater in their enterprise.
To that point, when is the last time you asked your entrepreneurial clients, “How have you protected your business from illness and injury?” I’d bet that question will be met with quite a dumbfounded look. After all, when’s the last time you heard of a corporation breaking it’s arm or being diagnosed with cancer?
A disabled business owner can leave customers lacking the essential services they need and employees without a leader. As a result, revenues will likely decline, but expenses will stay the same or perhaps even increase. This can lead to a tragic sequence of events: Customers fleeing to competition, downsizing by terminating key employees, acquiring debt at the worst time possible, maybe even shutting the doors via bankruptcy.
Enter Business Overhead Expense (BOE) insurance. This is a cost-effective solution to keep business operations intact, either for the return of the king or for sale at a deserving price. The conversation is strikingly similar to that of individual disability insurance. The same risks that face a family’s budget can impact a business. Mr. Client pays a mortgage at home just the same as the lease for the manufacturing plant, similar auto loans, taxes, etc. It’s also even easier to ask a client to cut a check from their business checking account than their personal, not to mention BOE is tax deductible as a ordinary and necessary business expense.
So the next time your client proudly states, “My business is my baby!” Don’t forget to remind him or her that their baby’s health is just as important as their own. Enjoy making more sales in the process of helping your clients protect their two biggest assets—income and enterprise.
