Worked example: a solo practice, a loan, and the month the owner could not work

Illustrative scenario. This is a hypothetical example constructed to demonstrate our analytical process. It does not describe an actual client engagement. All figures are illustrative, not quotes or projections. Tax points are general in nature; expense schedules and tax treatment are your CPA's work. Nothing here is a recommendation for any individual.

The situation

Bayline Dental (hypothetical) is a solo general-dentistry practice about two years past its opening: roughly $85,000 a month in collections, four staff, leased operatories and equipment, and the SBA loan that built it all. The owner is in her mid-forties, the practice is profitable, and on paper everything is working. But the business has one engine. Every dollar of those collections is produced by one person's hands, and every dollar of the overhead keeps drafting whether those hands are working or not.

The question that started the engagement was simple: what is the number? Not "would it be bad" — what, exactly, does one month of this practice cost when the owner cannot come in? Most owners two years in can answer faster than they'd like to admit, because they have paid that number twenty-four times. Almost none have asked who pays it in month twenty-five if they are the reason the chairs go quiet.

Finding one: price the month

Overhead expense coverage is sized from a number, so the first step is producing it honestly — the expenses that continue when production stops, itemized the way a carrier and a CPA both recognize.

Expense	What it covers	Monthly
Rent & utilities	The space, power, water — due in full regardless of production	$8,500
Staff salaries & payroll costs	Four people who keep the practice alive to return to — lose them and the recovery starts over	$19,500
SBA loan payment	The note that built the practice; the bank's schedule does not pause for recovery	$8,800
Equipment leases & maintenance	Operatories, imaging, sterilization — leased assets bill on their own calendar	$2,400
Insurance, accounting, software, phones	The quiet fixed layer every practice carries	$1,800
The month	Due whether or not the owner can work	$41,000

Then the second number: the recovery. The scenario here is the most common kind of claim, not the dramatic kind — a cervical disc injury, the occupational signature of a career spent bent over patients, ending in surgery and roughly four months away from clinical work. Four months at $41,000 is $164,000 of obligations with no production behind them. Without coverage, that comes from savings, a credit line drawn at the worst possible moment, a spouse's income, or letting staff go — and the last of those quietly converts a four-month problem into a permanent one.

Finding two: the odds are not what owners assume

Owners picture this risk as an accident, and accidents feel avoidable with care. The claims data says otherwise. According to the Council for Disability Income Awareness, the leading causes of long-term disability claims are musculoskeletal disorders (26%) and cancer (15%), with injuries third at 11% — the majority of claims are illnesses that care and caution do not prevent.¹ Just under one in four of today's 20-year-olds can expect to be out of work at least a year before reaching retirement age.² And the fallbacks owners assume exist mostly don't: workers' compensation applies only to work-caused conditions — in 2024, less than 1% of American workers missed work for an occupational illness or injury³ — while Social Security disability approves roughly 30% of claimants, takes months to decide, and pays a disabled worker about $1,630 a month on average.⁴ Against a $41,000 monthly obligation, that is not a plan.

Finding three: two facts the owner needed up front

The premiums are generally deductible

Overhead expense coverage is treated as a necessary business expense, so premiums are generally deductible to the practice — the mirror image of key-person coverage, where they are not. The trade runs the other way too: benefits are taxable as income when received, which is why the covered amount is sized against the gross expense schedule, not a net guess.

The benefit period is short on purpose

Overhead policies typically pay for 12 to 24 months. That is by design: the coverage exists to carry the practice through recovery — or, if recovery doesn't come, through an orderly sale on the owner's terms instead of a distressed one. Protecting the owner's own income for the long term is a separate job, done by an individual disability policy sized alongside this one.

The angle the lender cared about

The SBA loan that built this practice required life insurance at closing — the lender made sure of it. What the closing checklist never asked is who makes the loan payment while the owner is alive but cannot practice. Overhead coverage answers that question: it keeps the note performing through the exact scenario the closing documents skipped, which is why a banker who understands it is quietly glad to see a borrower put it in place.

Whose job is which The CPA confirms the expense schedule and the tax treatment. We size the monthly benefit against that schedule, set the elimination and benefit periods to match the practice's cash cushion, and structure the overhead policy alongside the owner's individual disability coverage so the business and the household are protected by the right instrument each. The screen that starts it all is one question: what does your month cost, and who pays it when you cannot?

Run the same tally on your business

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The overhead that continues without you — rent, payroll, loans, leases — netted against any revenue that survives your absence, with the exposure a recovery period creates. Expense tally only — no premiums, no quotes, no email required.

What the client receives

Every engagement produces a written analysis memo: the month priced line by line, the assumptions behind it, the elimination and benefit periods chosen and why, carrier-agnostic design specifications, and how the overhead policy coordinates with the owner's individual coverage. Carrier selection happens afterward, compared on the merits. The memo is the deliverable; the policy is its implementation.

Why we publish worked examples instead of testimonials

You can't evaluate an advisor by adjectives. You can evaluate one by reasoning. This page shows the reasoning — the same month-pricing exercise, applied to your business and coordinated with your CPA, is what an engagement looks like.

This scenario is hypothetical and for educational purposes only. All figures are illustrative and will differ based on individual circumstances and underwriting. Tax discussion is general in nature; the deductibility of premiums and the taxation of benefits depend on facts and structure and are your CPA's to confirm. Insurance products are subject to underwriting approval. LogicPoint Advisors does not provide investment, tax, or legal advice. Cosmin Mandachescu · FL 2-15 License #G335891.

Sources: 1, 2, 3, 4 — Council for Disability Income Awareness, Disability Statistics, citing Integrated Benefits Institute long-term disability benchmarking (claim causes), Social Security Administration disability probability tables (1-in-4 figure), Bureau of Labor Statistics occupational injury data (workers' compensation), and Social Security Administration program statistics (SSDI approval rates and average benefit).

Know your monthly number and want it covered? Start with a second opinion.

A first conversation is exploratory and at no cost. We will price your month the same way this page walks through Bayline's, and coordinate the expense schedule with your CPA.

A solo practice, a loan, and the month the owner could not work