Like most other individuals, a professional or business owner should usually have a good program of disability insurance. Of course, when the net worth of an individual becomes large enough (especially the liquid net worth) individual disability income insurance may no longer be available. Generally speaking, net worth starts to become an issue for disability insurance underwriting purposes at anywhere from 6 million to $10 million. Most professionals and business owners do not have a net worth that large.

Professionals and business owners very often present additional needs for specialized types of disability insurance. These would include disability insurance in the forms of salary continuation plans, business overhead expense disability insurance, disability buy-out insurance, and key person disability insurance. These products have developed over the years as a result of the problems created when business owners or key employees suffer a disability. The effect disability can have on small and sometimes even medium-size businesses can be quite devastating.

For sole proprietors and professionals, disability threatens both earned income and the continuation of the business. In these types of situations, very often the sole proprietor or professional generates all or most of the revenue that pays not only his or her salary, but the salary of employees and payroll taxes, rent or lease payments, office supplies, insurance premiums and a whole host of related expenses. Expenses related to the generation of income however are typically not covered by this type of disability insurance. In other words, if a sole proprietor in the business of selling medical supplies became disabled, his business overhead expense (OE) disability insurance policy would not pay for purchases of inventory.

In the event that the sole proprietor or professional were to become disabled, especially for an extended period of time, the business would likely be unable to pay for all of these expenses and would need this kind of disability insurance. For this special need, the business overhead expense disability insurance coverage is available. Note that some disability insurance companies may not issue this type of insurance until the professional or sole proprietor has disability insurance coverage on themselves. It should be noted that the amount of disability insurance a professional or sole proprietor may be eligible to qualify for will be a percentage of the net earnings plus his or her salary. For example, assume Dr. Jones is a dentist whose practice grosses about $30,000 a month. Assume that all expenses and salaries (excluding Dr. Jones's salary) equal approximately $15,000 a month. Dr. Jones takes home about $15,000 a month before taxes and has a disability insurance policy for about $7500 a month. If Dr. Jones were to become disabled, his $7500 a month disability insurance benefit could be adequate for his personal needs but there would be no money to keep his practice running. There are some OE disability insurance policies that also may help cover the cost of a temporary replacement while Dr. Jones is totally disabled. This form of disability insurance helps to assure continuity of service provided to the patients or clients of the disabled business owner or professional.

The OE disability insurance policy may have some language and definitions very similar to individual disability income insurance policies. In other words, the definition of total disability might very well be an "own occupation" or a "your occupation". When the definition of total disability in the OE disability insurance policy is something like this; "you are totally disabled if you are unable to perform the substantial and material tasks of your occupation", it is likely an own occupation or your occupation definition that is similar, if not identical to the definition found in own occupation disability insurance policies. The OE disability insurance policy is similar to other individual disability income insurance policies in other ways as well. For example, the OE disability insurance policy may also offer a residual rider. This would enable the business owner or professional to be able to collect a disability insurance benefit if he or she were unable to work full-time or not able to perform certain tasks of his or her occupation and as a result suffers a loss of revenue generally 20 percent or more.

The OE disability insurance policy may be issued, for example, with a 30, 60 or 90 day elimination period. The elimination periods will have an effect upon the premium and it is up to the disability insurance planner and professional or business owner to determine which elimination period is suitable. Unlike individual disability insurance policies, OE disability insurance usually offers a limited benefit period. It is common to find disability insurance plans with 12, 18 and 24 month benefit periods. Much like the elimination period, the length of the benefit period will have a significant effect upon the premium.

The key question in determining whether or not OE disability insurance is necessary is "could the business entity function reasonably and be able to maintain revenues during the owners disability?" The decision to purchase OE disability insurance should typically be done on a case-by-case basis. For instance, a large architectural firm with 20 practicing architects would likely be less affected were one of its architects to become disabled than if the firm only had two practicing architects. Certainly, OE disability insurance would more likely be necessary in the latter.