Business Overhead Disability Insurance (BODI) is protection for doctors and medical professionals providing a safety net when unable to work due to a disability. Protect your practice while you recover.
Business Overhead Disability Insurance (BODI): Disability Insurance For Doctors Explained
How Long Can Your Business Survive When You're on Disability?
Business Overhead Disability Insurance (BODI) is a crucial form of protection for doctors and medical professionals. It provides a safety net for those who may become unable to work due to a disability, ensuring that their practice can continue to operate in their absence. This glossary article will delve into the intricacies of BODI, its importance, how it works, and the various factors to consider when purchasing this type of insurance.
As a doctor, your ability to work and generate income is your most valuable asset. However, the risk of disability is real and can strike at any time, irrespective of your health or age. BODI is designed to cover the overhead expenses of your medical practice if you are unable to work due to a disability, providing financial stability and peace of mind.
Understanding Business Overhead Disability Insurance
Business Overhead Disability Insurance is a type of disability insurance specifically designed for business owners, including doctors. It provides monthly benefits to cover the fixed overhead expenses of running a medical practice, such as rent, utilities, salaries of non-doctor staff, and more, in the event of the owner's disability.
Unlike personal disability insurance, which replaces a portion of your income if you become disabled, BODI is designed to keep your business afloat. It ensures that your practice can continue to operate, maintain its value, and provide services to patients even if you are unable to work.
Why BODI is Important for Doctors
As a doctor, if you become disabled and unable to work, not only do you lose your income, but you also have to bear the burden of ongoing business expenses. Without a sufficient backup plan, you may be forced to close your practice, which can be financially devastating.
BODI acts as a financial lifeline in such situations. It covers the overhead expenses of your practice, ensuring that it remains operational and retains its value. This allows you to focus on your recovery without worrying about the financial health of your practice.
How BODI Works
BODI works by providing a monthly benefit to cover your practice's overhead expenses if you become disabled. The benefit period typically ranges from 12 to 24 months, which is generally sufficient time for most doctors to either return to work or make alternate arrangements for their practice.
The amount of monthly benefit you can receive is based on your practice's actual overhead expenses, up to the maximum limit specified in the policy. The benefits are paid after a waiting period, also known as the elimination period, which is typically 30 to 60 days from the onset of disability.
Key Features of BODI
There are several key features of BODI that make it a valuable form of protection for doctors. These include the coverage of overhead expenses, the definition of disability, the waiting period, the benefit period, and the premium structure.
Understanding these features is crucial to making an informed decision when purchasing BODI. Each feature can significantly impact the level of protection you receive and the cost of the policy.
Coverage of Overhead Expenses
BODI covers a wide range of overhead expenses associated with running a medical practice. These typically include rent or mortgage payments, utilities, salaries and benefits of non-doctor staff, insurance premiums, property taxes, office supplies, and more.
The policy reimburses you for these expenses, up to the maximum monthly benefit specified in the policy. It's important to accurately estimate your practice's overhead expenses when purchasing BODI to ensure you have sufficient coverage.
Definition of Disability
The definition of disability in a BODI policy determines under what circumstances you are eligible to receive benefits. Most policies define disability as the inability to perform the material and substantial duties of your occupation due to sickness or injury.
Some policies offer "own occupation" coverage, which means you are considered disabled if you are unable to perform your specific medical specialty, even if you can perform other medical or non-medical work. This type of coverage provides the highest level of protection and is particularly important for doctors with highly specialized skills.
Factors to Consider When Purchasing BODI
There are several factors to consider when purchasing BODI. These include the amount of coverage you need, the waiting period, the benefit period, the premium structure, and the insurance company's financial strength and reputation.
Making an informed decision requires a thorough understanding of these factors and how they impact the cost and level of protection provided by the policy.
Amount of Coverage
The amount of coverage you need is determined by your practice's overhead expenses. You should aim to have enough coverage to meet these expenses for the duration of the benefit period.
To determine the amount of coverage you need, add up all your practice's fixed overhead expenses, such as rent, utilities, staff salaries, and more. Then, consider any potential increases in these expenses over time due to inflation or expansion of your practice.
Waiting Period
The waiting period, or elimination period, is the time you must wait from the onset of disability before you can start receiving benefits. The waiting period typically ranges from 30 to 60 days, but can be longer.
Choosing a longer waiting period can lower your premiums, but it also means you'll have to cover your practice's overhead expenses out of pocket for a longer period if you become disabled. Therefore, it's important to strike a balance between the cost of the policy and the financial risk you are willing to bear.
Business Overhead Disability Insurance for Doctors: Conclusion
Business Overhead Disability Insurance is a vital form of protection for doctors. It provides a financial safety net that ensures your practice can continue to operate if you become unable to work due to a disability. Understanding the intricacies of BODI, its key features, and the factors to consider when purchasing this type of insurance is crucial to making an informed decision that safeguards your most valuable asset - your ability to work and generate income.
As a doctor in Ontario, it's important to consult with a knowledgeable insurance advisor who can guide you through the process of purchasing BODI. They can help you understand the nuances of different policies, compare quotes from various insurance companies, and choose a policy that best meets your needs and budget.
Disability Insurance Advisor Contact
Disability Insurance is Complicated
Here are answers to frequently asked questions...
No, the only thing you will ever pay is a premium to the insurance company that provides the disability insurance policy for you.
Yes, we have access to various discounts based on your income, your affiliation with a specialty association and other factors. These discounts will be determined and applied during your quote request process
Rates are based on your age, health history, smoking status, gender and income. The insurance company also compares and makes assessments based on similar individuals with the same profile like age, gender, smoker status, specialty and province of practice. Unlike association rates which are based on the claims of the whole group i.e. your rate is affected by someone who smokes even if you don't smoke, or if you neve claim and other claim multiple times, for example.
We simplify the process knowing how busy doctors get and need flexibility. The first step is simply to request your quotes and getting a sense of the cost and coverage available. Next, we compare the policy options and other riders like Own Occupation and discuss what makes sense for you and answer your questions. Lastly, you apply and buy risk-free.
Yes you can increase it and that is our recommendation. Anywhere you do residency in Canada for example, you’re automatically enrolled in a health-benefits plan, which includes disability insurance coverage. As a resident you can purchase a private disability policy under the Medical Student Offer for example. The benefit of this is that you don't have to go through a medical examination to qualify.
The more relevant clause is what's called "Future Income Option" which gives you the option in the future to buy more disability insurance if your income increases, without having to worry about your health having changed just in case. The monthly benefit and premium will depend on your new income, age, and province you’ll be practicing. The process is simple and will not require you to undergo medical underwriting.
In most cases, it can take between 1-3 months from beginning to end. A lot of the time may depend on follow up information required by the insurance company. In our experience 1 month is usually a standard timeframe.
As an independent insurance broker we have no affiliation with any one insurance company. We know which insurance company is most suited for the type of disability insurance policy that is most conducive for doctors. As a broker we get a finders fee from these insurance companies and they are all the same, without any financial conflict of interest either.
Underwriting is where the insurance company verifies your information that you submitted on the application your complete with us and gathers additional details such as health history , travel, and personal history to determine the best rate possible.