Guardian Disability Insurance Brokerage

Common Scenario: First-Year Business Owner

There are many concerns and costs in operating a first year business. Insurance companies will only insure income that you can prove on a tax return. As a first year business owner, if you have been employed in the same industry before, Guardian may make offers to cover your income, even though you don't have a tax return to prove your income level as of yet.

Your Performance Is Critical

As a business owner, especially in the first year of operation, the business probably lives and dies with your performance. You may or may not have had a chance to recover your starting costs, and you probably don't even know what your year-end tax return will look like yet. Since disability insurance will only cover income, and business expenses shown on a tax return, first year business owners have a problem obtaining the necessary amounts of coverage. You have a good idea as to the success of your business, and available income, but the tax return will be dealt with in April.

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What We Look At

Revenues are one of two indicators an underwriter will look at when you apply for disability insurance. We will want to see any contracts that you currently have, year to date profit and loss statements, and your last year's tax return and W-2's for the job you held previously. The other indicator is the amount of time you have been in this industry. Berkshire is more inclined to offer a higher amount of coverage to somebody who has been employed in the information technology field for six years, then started his own company. If an offer can be made, Berkshire may offer smaller amounts of coverage to a business owner who changed industry fields all together.

Coverage

Two types of coverage should be applied for as a business owner in the first year of operation. Obviously you will need personal disability income insurance to protect your personal income, but you should also purchase overhead expense coverage to protect your business should you become disabled. This second coverage will make sure you have a business to come back to when you recover from a disability.

Why Berkshire?

Our disability insurance contracts have a rider available that we refer to as future increase option. This rider allows a first year business owner to obtain the maximum amount of coverage now, and purchase the ability to increase this amount on his policy anniversary date every year based on current documented income. It guarantees that we will grow this policy with your business even if you have a change in health that would normally prevent you from obtaining more coverage. While you may want $5,000 a month now in personal disability insurance, if you are in your first year of operation we may only offer you $3,000 a month, but Berkshire may offer you $2,000 a month of future increase option. It is truly the next best thing available until you have a tax return proving a net income.

Our Specialists Will Work With You

We recommend all first year business owners work with one of our disability specialists through the application process. Our specialists can obtain the maximum amount of coverage possible in your first year of operation. Going this one alone is a big mistake; we have the relationships necessary to offer first year business owners the maximum amount available. Our specialists have worked thousands of cases with the same underwriters, and know them personally. We can work on your behalf to obtain maximum coverage that may otherwise not be possible.

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