CARD Q087
A disabled owner needs a policy to reimburse eligible business rent and utility expenses. Which coverage addresses that need?
- Disability buyout insurance
- Business overhead expense insurance
- Personal disability income alone
- Credit life insurance
Business overhead expense insurance
Business overhead expense coverage helps meet specified operating expenses. Buyout coverage instead helps finance transfer of an owner’s interest.
Why each choice is right or wrong
A. Disability buyout insurance
Incorrect. Buyout coverage funds ownership transfer rather than ordinary rent and utilities.
B. Business overhead expense insurance
Correct. Business overhead expense coverage helps meet specified operating expenses. Buyout coverage instead helps finance transfer of an owner’s interest.
C. Personal disability income alone
Incorrect. Personal disability income is not specifically designed to reimburse eligible business overhead.
D. Credit life insurance
Incorrect. Credit life responds to death and debt, not these operating expenses during disability.
Review the related terms
Use these lessons to revisit the concepts and try additional practice questions.