Veterinarians purchasing a practice with a bank loan may be required to purchase disability insurance before the bank will release the loan.
The policy will pay a monthly payment to pay for the duration of the loan. For example, if you have a 10 year loan period and become disabled in year 3, the policy will pay benefits for the remaining 7 years. There are very specific policies available to cover this need and there are specific advantages to using a business loan policy:
1) Cost. It is much less expensive to use a business loan policy than an individual disability policy.
2) Tax deductibility. You may deduct the premiums for your business loan policy as the benefits received are being used for a tax deductible item. Personal disability policies should be paid with after tax dollars so the benefits are tax free at the time of claim.
3) If you use your individual disability policy to cover the loan, you may not have enough benefit available to cover your personal needs. When you purchase an individual disability policy, you are eligible for a maximum amount of benefit based on your income. If some of this benefit is tagged to pay the loan, you will be limited to the remaining amount to cover your own personal benefits.
For more information about veterinarian disability insurance or for business loan insurance policy information, please contact Set for Life Insurance today!