Business Disability Insurance 

Disability Overhead Expense

You rely on your personal income to pay your expenses such as your mortgage, taxes, food, clothing, etc. Your business relies on you to pay its expenses. If you become disabled, where will the money come from?

A personal disability income protection policy from Northwestern Mutual can protect your own ability to earn an income, pay living expenses and help you maintain a standard of living to which you’ve become accustomed.

A disability overhead expense policy from Northwestern Mutual can protect your business’ ability to cover ongoing overhead expenses and help ensure your business can keep going when you’re disabled.

When a business is running smoothly and revenue is flowing, ongoing overhead expenses may not require much attention. But that can change in an instant when a business owner suffers a long- or short-term disability.

If you haven’t considered what it costs your business to stay open, take a few minutes and download the Keeping Your Business Running brochure to learn more.

Northwestern Mutual's Disability Overhead Expense coverage is designed to provide a benefit for covered overhead expenses when a business owner is totally or partially disabled.

Non-Cancellable and Guaranteed Renewable

The Disability Overhead Expense policy is guaranteed renewable upon timely payment of the premium to the first policy anniversary after the Insured's 65th birthday. During that period, the policy can neither be canceled nor have its terms or premiums changed by the Company.

Beginning Date

Disabilities are not always measured in consecutive days. Northwestern Mutual allows an extended period of time to accumulate days of total or partial disability toward the Beginning Date of benefits. Days of disability due to different causes will be accumulated to satisfy the Beginning Date.

Total Disability

You are totally disabled when unable to perform the principal duties of your regular occupation. If you can perform one or more principal duties, you are not totally disabled, but may qualify as partially disabled.

Partial Disability

Partial disability occurs when:

• You are unable to perform one or more, but not all, of the principal duties of your regular occupation, or you are unable to spend as much time at your regular occupation as before the disability.
• Due to the disability, your Covered Overhead Expense for the month is more than the total income for the month by at least $200.
• You are gainfully employed in an occupation.

Aggregate Benefit Amount

There is no limitation on the length of time benefits can be paid. Instead, the Aggregate Benefit Amount specifies the maximum amount payable per disability from injury or illness for both total and partial disability.

Carryforward of Unused Benefits and Expenses

Unused benefits and expenses can be carried forward for use in future months during the same disability.

Waiver of Premium

• Waives premiums on your disability insurance contract during periods of total or partial disability.
• Helps further with cash flow during a potentially difficult financial time.

Presumptive Total Disability Benefit

• For total and irrecoverable loss of vision, hearing, or speech, or for loss of use of two or more limbs (hands/feet).
• Benefit is paid from the date of the loss without a beginning date.
• Benefit is paid for life, as long as the disabling condition continues.

Download Keeping Your Business Running Brochure

The policies described here refer to policy forms RR.DOE.(0101) and QQ.DOE.(1206).CA, which may not be available in all states. This information is intended to explain provisions contained in the policy; it is not the insurance contract, only the actual provisions will control. Precise contract language may vary from state to state.

Exclusions and limitations include pre-existing conditions. There will be no benefits for a disability or loss that results from an accident that occurred within five years before the Date of Issue; or results from a sickness that existed within five years before the Date of Issue; or if the accident or sickness was not disclosed or was misrepresented in the application.

A sickness is considered to have existed if symptoms were present that would have caused a prudent person to seek diagnosis, care or treatment; or if medical advice or treatment was recommended or received from a health care practitioner.

There will be no benefits for a disability or loss that is caused or contributed to by an act or incident of war, declared or undeclared, the suspension, revocation or surrender of a professional or occupational license or certificate or the commission of or attempt to commit a felony. There will be no benefits for a disability or loss for any period the Insured is incarcerated or is excluded from coverage by an Agreement of Limitation of Coverage.

For complete policy details, contact a Northwestern Mutual financial representative.

Key Person Disability Insurance

A select group of employees are the primary reason for your profitability and success. Your business wouldn’t be what it is today without their knowledge, experience and skill.

While it’s routine for businesses to insure against the loss of physical assets, like equipment and buildings, many overlook protecting against the loss of their human assets.

Consider how the loss of one or more key employees might impact your business.

• Would customers leave?
• Might revenue and profitability drop?
• Can other employees fulfill those unique responsibilities?
• Do other employees have time to perform those responsibilities?
• Are assets available to cover the costs to locate, hire and train a replacement?
• How will creditors respond to the loss of a key contributor?

Evaluating your need for life insurance is one step toward safeguarding and growing your business. Another step is evaluating your need for disability insurance.

For most of us, suffering a sudden disability is unimaginable, especially if we have always enjoyed good health.

Disability insurance is purchased on a key employee for similar reasons … to strengthen cash flow, to assure creditors of business continuity and to locate, hire and train a replacement if the employee becomes sick or hurt and unable to work.

How Key Person Disability Income Works

Upon the disability of the key employee, the employer receives funds for the loss of the key employee. The funds can be used to replace a portion of business profit lost to the key employee's disability or to attract and train a replacement for the key employee.

Conditionally Renewable with Guaranteed Premiums

Once you enter into a Key Person Disability Contract with Northwestern Mutual, the contract cannot be changed unilaterally by the Company. The policy can be renewed on each policy anniversary up to age 65 provided the Insured is working full-time in the business and the Insured owns no more than 50% of the business.

Total Disability

If the Insured is totally disabled, he or she is unable to perform the principal duties of his or her regular occupation. If one or more principal duties can be performed, the Insured is not totally disabled and may qualify as partially disabled.

Partial Disability

Partial disability occurs when the Insured is unable to perform one or more principal duties that accounted for at least 20% of the time spent at the regular occupation before disability began. Or, if the Insured has at least a 20% loss of time spent at the regular occupation. The benefit for partial disability is paid at 50% of the Full Benefit for up to six months of partial disability.

Replacement Benefit

This benefit is paid to an employer, in lieu of other benefits, when a replacement is hired to perform the Insured's occupation if:

• The Insured is totally disabled and no longer works in the owner's business in any capacity.
• The Insured's disability, total and partial combined, has lasted at least six months.
• The Owner has hired a replacement for the Insured.
• There is at least one month remaining before the end of the Maximum Benefit Period.

Change of Insured

The Owner may change the Insured under the policy by paying the required costs and meeting any other conditions.

Waiver of Premium

• Waives premiums on the disability key person insurance contract during periods of total or partial disability.
• Helps further with cash flow during a potentially difficult financial time.

Presumptive Total Disability Benefit

• For total and irrecoverable loss of vision, hearing, or speech, or for loss of use of two or more limbs (hands/feet).
• Benefit is paid from the date of the loss without a beginning date.
• Benefit is paid as long as the disabling condition continues during the Maximum Benefit Period.

Download Key Person Protection Brochure

The policy described here refers to policy forms RR.KEY.(0101) and QQ.KEY.(1206).CA, which may not be available in all states. This information is intended to explain provisions contained in the policy; it is not the insurance contract, only the actual provisions will control. Precise contract language may vary from state to state.

Exclusions and limitations include pre-existing conditions. There will be no benefits for a disability or loss that results from an accident that occurred within two years before the Date of Issue; or results from a sickness that existed within two years before the Date of Issue; or if the accident or sickness was not disclosed or was misrepresented in the application.

A sickness is considered to have existed if symptoms were present that would have caused a prudent person to seek diagnosis, care or treatment; or if medical advice or treatment was recommended or received from a health care practitioner.

There will be no benefits for a disability or loss that is caused or contributed to by an act or incident of war, declared or undeclared, the suspension, revocation or surrender of a professional or occupational license or certificate or the commission of or attempt to commit a felony. There will be no benefits for a disability or loss for any period the Insured is incarcerated or is excluded from coverage by an Agreement of Limitation of Coverage.

For complete policy details, contact a Northwestern Mutual representative.

Disability Buy-Out Coverage

Whether large or small, whether organized as a corporation, a partnership, a limited liability company or a sole proprietor, you must be prepared for that day.

Having a strategy for retirement, disability and death is crucial for a smooth transition and future success … for you, your associates, your families, your employees and your business. For most of us, suffering a sudden disability is unimaginable, especially if we have always enjoyed good health.

Disability insurance reimburses the buyers of the business with tax-free benefits, and it’s instrumental in determining when an owner is totally disabled.

Assess your preparedness to protect what you and your associates have worked hard to build.

• What are your desired departure dates?
• Who will buy you and your associates out at retirement, disability and death?
• How will your business interests be transferred? Who will determine when those
  interests should be transferred?
• Do you have a written buy-sell agreement?
• How is it funded and when was it reviewed last?
• Will you be able to retain your key employees?
• If you want family members to run the business, what’s being done to prepare them for management?
• Have you provided for the security and continuity of your families?

Disability Buy-Out Coverage funds a disability buy-out agreement between business owners, if a total disability gradually forces one of the owners to stop working. It is designed to reimburse the buyers of a business for the cost of purchasing the disabled Insured's interest in the business.

Conditionally Renewable with Guaranteed Premiums

Once you enter into a Disability Buy-Out Contract with Northwestern Mutual, the contract cannot be changed unilaterally by the Company. The policy can be renewed on each policy anniversary up to age 65 provided the Insured is working full-time in the business and the Insured owns some, but not more than 90%, of the business and benefits to reimburse buyout expenses have not been paid under the policy.

Beginning Date

This is the date on which benefits become payable after the Insured becomes totally disabled. Northwestern Mutual offers Beginning Dates of 366 days or 731 days. The Insured does not have to be continuously disabled to qualify for the Beginning Date.

Total Disability

The Insured is totally disabled when unable to perform the principal duties of the regular occupation and not working in any capacity in the business.

Regular Occupation

Disability insurance coverage is provided for the Insured's occupation in the business at the time the Insured becomes disabled. If the Insured is regularly engaged in more than one occupation in the business, all of the occupations of the Insured in the business at the time the disability starts will be combined to be the regular occupation. Other occupations the Insured may have outside the business, if any, do not apply.

Buy-Out Benefit

The contract provides a benefit to reimburse buy-out expense. Buy-out expense is the amount that has actually been paid to the Insured to purchase the Insured's ownership interest in the business, provided the amount is paid under the terms of a written buy-out agreement in effect on the Beginning Date and the amount has been determined using a
generally recognized valuation method.

Death or Recovery from Disability

If the buy-out agreement provides that the purchase of the Insured's ownership interest shall continue even though the Insured, after the Beginning Date, dies or recovers from total disability, the Benefit will be payable as though the Insured had continued to be totally disabled.

Waiver of Premium

• Waives premiums on the disability buyout insurance contract while the Insured is totally disabled if the total disability lasts for at least 90 consecutive days.
• Helps further with cash flow during a potentially difficult financial time.

Change of Insured

The Owner may change the Insured under the policy by paying the required costs and meeting any other conditions.

Download Business Succession Brochure

The policy described here refers to policy forms RR.BUY.(0101) and QQ.BUY.(1206).CA, which may not be available in all states. This information is intended to explain provisions contained in the policy; it is not the insurance contract, only the actual provisions will control. Precise contract language may vary from state to state.

Exclusions and limitations include pre-existing conditions. There will be no benefits for a disability or loss that results from an accident that occurred within two years before the Date of Issue; or results from a sickness that existed within two years before the Date of Issue; or if the accident or sickness was not disclosed or was misrepresented in the application.

A sickness is considered to have existed if symptoms were present that would have caused a prudent person to seek diagnosis, care or treatment; or if medical advice or treatment was recommended or received from a health care practitioner.

There will be no benefits for a disability or loss that is caused or contributed to by an act or incident of war, declared or undeclared, the suspension, revocation or surrender of a professional or occupational license or certificate or the commission of or attempt to commit a felony. There will be no benefits for a disability or loss for any period the Insured is incarcerated or is excluded from coverage by an Agreement of Limitation of Coverage.

For complete policy details, contact a Northwestern Mutual representative.