Business Solutions for Dental Practices
Running a successful dental practice is physically demanding and very expensive. Graduate school loans, mortgages, equipment financing, book of business buy-outs and property leases can all negatively affect the bottom line of a dental professional. Most general-practice dentists, dental specialists and oral surgeons are holders of multiple bank notes, letters of credit, promissory notes and/or business loans to compensate for expenses above and beyond basic overhead costs.
The lenders of such capital often require financial protection in the form of collateralized insurance – life and disability. The life insurance requirement can be addressed by the assignment of benefits of a term product or more appropriately, the purchase of Petersen International’s Business Loan Failure to Survive simplified-issue product which allows for quick and painless assignment of benefits to a lender. The disability insurance requirement, on the other hand, poses a more complicated predicament.
Within the disability insurance realm, a dentist has numerous plan choices, but most are ineffectual for proper loan indemnification, or are enacted at the detriment of other necessary forms of financial protection. A common, yet misguided option is the assignment of personal disability benefits for business loan requirements. This option solves the demands of the lender, but at great financial risk to the client. During a period of disability, the client’s personal income benefits would flow to a third party instead of the pocket of the disabled where they are needed most during a financial crisis. This option directly endangers the economic wellbeing of the dentist and his/her family.
Other options include the assignment of business overhead expense or key person DI policy benefits. But those products usually limit benefit periods to 12 to 24 months which is commonly unacceptable to lending institutions in most business loan situations. Additionally, assigning benefits of those products also misplaces funds toward lender requirements instead of their proper allocation of other business overhead expenses like utility bills, insurance premiums and staffing costs.
Petersen International Underwriters has a specific solution. Our Loan Indemnification Disability Insurance program is designed to cover 100% of loan repayment schedules with “own occupation”, specialty-specific defined benefits. Policy terms are flexible with monthly benefit periods up to 10 years that can be dovetailed with optional lump sum benefits. The client may also include a residual disability rider as well as a “prime flex loan adjustment” benefit which allows payment schedules to coordinate with variable interest rates.
Most importantly, the Petersen International Loan Indemnification DI plan does not coordinate nor tamper with personal DI benefits. The plan is available in excess of any personal or group DI, key person, BOE or buy/sell coverage. Although the product is a perfect fit for owners of busy dental practices, this policy is also a proven solution for any business owner needing disability insurance to satisfy business loan requirements.
For additional insurance solutions for your dentist clients and business prospects, call Petersen International at (800)345-8816.