Office Overhead Expense Insurance
Covering office expenses if illness or injury keeps you from working.
You Are Eligible For:
Monthly benefits to cover expenses such as rent, utilities and staff salaries
Special features such as survivor and maternity leave benefits
Options to tailor the plan for your needs
Why Invest in Office Overhead Expense Insurance?
If you suffer a disabling injury or illness, Long Term Disability Insurance will help protect your income. But that is only part of the picture, since you will still have to contend with the ongoing expenses of your practice.
That's where Office Overhead Expense Insurance helps out. The plan pays the eligible office expenses you actually incur — up to monthly coverage amount — if illness or injury prevents you from working.
How Office Overhead Expense Insurance Covers You
If you became disabled, Office Overhead Expense Insurance covers such expenses as rent, utilities, employee salaries, laundry services and interest on loans for office equipment for up to 12 or 24 months (based on your coverage choice when applying).
Coverage of up to $40,000 per month is available to dentists under age 55 (and may be maintained past that age). Dentists age 55-64 are eligible to apply for up to $20,000 per month of coverage.
Gain other important advantages
The Office Overhead Expense Insurance plan also offers:
- A choice of 14-day and 30-day elimination periods (or a combination of periods)
- A Residual Disability Benefit that provides pro-rated benefits when a partial disability limits your ability to work, resulting in a loss of income of at least 20%.
- A Survivor Benefit that pays your estate a benefit amount equal to three times your monthly benefit amount following your death. (You do not have to be disabled at the time of your death for this benefit to be paid.)
- A Maternity Leave Benefit that covers a portion of your actual office expenses incurred, up to a specified amount maximum*, during a full-time maternity leave. (To qualify for this benefit, you must have been enrolled in the Office Overhead Expense Insurance plan for at least 12 months prior to your child's birth. The benefit applies to maternity leaves following pregnancies).
*The employment insurance maximum for your province of residence.
Choose from two benefit periods
Select a benefit period (the amount of time during which benefits are payable during a disability) that's right for your needs — 12 months or 24 months.
Choose your own payment schedule
You can choose a fixed or reducing payment schedule, or a combination of schedules. Fixed costs as rent are ideally covered with a constant payment schedule. Variable costs such as salaries can be covered by a reducing payment schedule.
Pay no premiums when totally disabled for six months or more
In the case of a total disability lasting six continuous months or more (before age 65), your premiums are waived if total disability continues and you are not working. In addition, you are reimbursed for all premiums paid during your first six months of total disability.
Save money with healthedge premiums
Dentists who are in excellent health and who maintain healthy lifestyles may receive special savings on Office Overhead Expense Insurance with HealthEdge premiums. When you first apply for coverage, you will be considered for HealthEdge rates if you:
- Have not used any form of tobacco or tobacco cessation products in the 12 months prior to signing the application
- Have not used marijuana or any form of illicit drug, or been treated for or advised to reduce alcohol in the past seven years
- Have not been declined for life or health insurance or offered coverage on a modified basis in the past five years
- Do not plan to, and have not been advised to consult a physician or specialist or to have a diagnostic test or surgery performed (excluding routine physicals)
- Have not been disabled for a total of six months or more in the last five years
- Are not currently receiving (or intending to submit a claim for) disability benefits
- Have not received treatment for cancer (except basal cell carcinoma), coronary artery disease, stroke, diabetes, lung, liver or kidney disorder, HIV infection, AIDS, psychiatric disorder, any chronic pain disorder, recurrent back or neck pain, or any other significant medical disorder in the last five years
Options
FUTURE INSURANCE GUARANTEE (FIG) OPTION†
The FIG Option allows you to increase coverage by 25%, without evidence of good health (financial evidence will be required), when you marry or when you have lived in a common-law relationship for at least two years, or upon birth or adoption of a child. It also shows you to increase coverage on your birthday at ages 25, 30, 35, 40, 45 and 50. You must contact CDSPI to request an application form and submit it within 60 days** of any of the above events. Also, you must be actively practising dentistry, under age 51 and not on disability claim to exercise this option. To qualify for increased coverage you must provide evidence of increased eligible expenses.
**If you are on maternity or parental leave, you may have an extended period to exercise the FIG option. Contact CDSPI for details.
Own Occupation Option†
If a continuing total or residual disability prevents you from engaging in your regular occupation (all occupation(s) in which you were engaged immediately prior to becoming disabled) this option reimburses you for eligible office overhead expenses even if you are able to earn income from a new occupation.
† When applying for these options, medical evidence of good health must be provided.
Benefits period options
You have a choice of two benefit period options:
- With the 12-Month Benefit Period Option, you are eligible to receive Office Overhead Expense Insurance benefits for a period of up to 12 months during a disability
- With the 24-Month Benefit Period Option, you are eligible to receive Office Overhead Expense Insurance benefits for a period of up to 24 months during a disability
Premiums under the 24-Month Benefit Period Option are higher compared to those under the 12-Month Benefit Period Option, because the benefit payment period is longer.
You may choose either the 12- or 24- Month Benefit Period Option, or a combination of the two.
BENEFIT PAYMENT PLAN OPTIONS
When you select the 12-Month Benefit Period Option, there are two ways benefits can be paid to you.
Option #1 (12-Month) — the "reducing plan" — pays you up to 100% of your monthly benefit amount at the start, then reduces to 65% after three months of your claim, and to 40% after nine months.
Option #2 (12-Month) — the "fixed plan" — pays you up to 100% of your monthly benefit amount every month, for up to 12 months, but the premium is higher than with the reducing plan.
When you select the 24-Month Benefit Period Option, there are two ways benefits can be paid to you.
Option #1 (24-Month) — the "reducing plan" — pays you up to 100% of your monthly benefit amount at the start, then reduces to 65% after three months of your claim, and to 40% after nine months.
Option #2 (24-Month) — the "fixed plan" — pays you up to 100% of your monthly benefit amount every month, for up to 24 months, but the premium is higher than with the reducing plan.
Both the reducing and fixed plans (under either the 12- or 24-Month Benefit Period Options) pay the eligible office expenses you actually incur, to a maximum of your monthly benefit amount. You are given a choice between fixed and reducing plan options so you can economize on premiums by purchasing just the coverage you need.
- Dentists who know their overhead expenses would remain the same during a disability may choose the fixed plan for all their coverage (for instance, in the case of hiring a locum who treats most of your patients)
- Dentists who know their overhead expenses would decrease over time — usually because of laying off staff or reducing their hours — may choose the reducing plan for part of their coverage
- Dentists who are unsure of how a disability would affect their overhead expenses may choose the fixed plan for all of their coverage if they prefer the cautious route, or may divide their coverage between fixed and reducing if their want to economize on premiums
Elimination Periods
Under either the 12- or 24-Month Benefit Options, you have a choice of two elimination periods — 14 day or 30-day. The 30-day elimination period is more economical, but you must wait longer for your benefits to start.
For most dentists, the main criteria are often how staff are paid and the cash flow situation. If you have money in the bank you are prepared to use for a month's office overhead expenses, the choose the 30-day period. If cash is tight and your staff are paid bi-weekly, you may favour the 14-day period. Some dentists split their coverage between the two periods, covering immediate expenses under the 14-day period and the rest under the 30-day period.
For each payment option — reducing and fixed — you may choose one elimination period, or split you coverage between the two elimination periods.
Conditions and Limitations
Details, terms, conditions and exclusions are set out in the certificate booklet for the Office Overhead Expense Insurance plan. Please note:
- Expenses for which a partner, associate or locum has contributed (either under a long-term or temporary agreement) while you are disabled are not covered by Office Overhead Expense Insurance
- In the case of a partnership (or other office cost sharing arrangement), only the insured's share of eligible expenses are covered under the plan
- Office Overhead Expense Insurance benefits are not payable for disabilities resulting from intentionally self-inflicted injuries; war, whether declared or not, any act of war or act of terrorism, participation in a riot, civil commotion or in-surrection; committing, attempting or provoking an assault or criminal offence other than an offence involving the operation of a motor vehicle or vessel
- If you make a material change in your practice within the two years before your disability begins that results in permanent or long-term reduction in your practice income (such as selling your practice, changing from being a partner to being an associate, etc.), the insurer may adjust the income used to calculate your loss of earned income for the purpose of determining if you qualify for Office Overhead Expense insurance benefits by using your actual annual income since the date of the material change or a reasonable estimate of what you practice income would have been had you not become disabled. Similarly, an income adjustment may be made by the insurer if a material change in your practice (made by you following a disability, which is not required solely as a result of your disability) results in a permanent or long-term reduction in your practice income
eligible office overhead expenses
Eligible Office Overhead Expenses refer to the actual expenses reasonably incurred in the operation of a dental practice and may include:
- Rent of and mortgage interest on business premises
- Property taxes on the business premises and business taxes
- Heat, water and electricity
- Telephone
- Internet service
- Accountant's services
- Salaries of employees (excluding other dentists)
- Depreciation of owned (or the cost of rented or leased) office equipment
- Professional association memberships dues
- Premiums for business insurance
- Premiums for a dentist's employees relating to provincial hospital, medical insurance, group life and/or health insurance coverage
- Practice of laundry
- Fees of a management company hired by a dentist (assuming the fees are attributable to the normal professional duties of the dentist)
- Interest charged on loans for office equipment
ineligible office overhead expenses
The following items are among those which cannot be claimed under the Office Overhead Expenses:
- Expenses for which the dentist is entitled to be reimbursed under any other insurance plan
- Vehicle leasing costs or any other expenses relating to the operation of a motor vehicle (other than reasonable expenses which are allowed by the Canada Revenue Agency as a deduction for income tax purposes)
- The cost of goods, wares or merchandise or any nature
- Salary or other remuneration of the insured dentist or any other dentist
- Any expenses paid by a locum or associate, if any, hired to perform all or part of your duties
Annual Premium Rates and Insurance Limits
Provincial taxes are extra where applicable under provincial laws. The elimination and benefit period(s) you choose should be tailored to suit your income and spending patterns. Remember, the longer you wait for your benefits to begin (in other words, the longer the elimination period) and the shorter benefit period (12-month) you choose, the lower the premium you pay.
Insurance is available in units of $100 of monthly benefit, from a minimum of $500 to a maximum of $40,000 of total monthly coverage (depending on age).
Applications for monthly coverage in excess of $20,000 must be made prior to age 55.
Application
Eligible dentists are able to apply online for Office Overhead Expense Insurance.
Eligibility
You are eligible to apply for Office Overhead Expense Insurance if you are a licensed dentist resident in Canada under age 65, who is a member of the CDA or a participating provincial or territorial dental association (in Quebec, only CDA members are eligible).
Coverage of up to $40,000 per month is available to dentists under age 55. Dentists ages 55 to 64 are eligible to apply for up to $20,000 per month of coverage. If you obtain more than $20,000 per month of coverage prior to age 55, you will be able to keep this amount of coverage (up to age 70) provided that your premiums are paid.
In order to qualify for coverage, medical evidence of good health and financial evidence must be provided. Coverage is subject to approval by the insurer.
Speeding Up the Application Process
All applications submitted will be reviewed promptly by the insurer. However, the process may be delayed if you do not submit all the information asked for and if all questions are not answered completely. After you submit your insurance application(s), routine blood and urinalysis tests may be required. These tests can be done at your home or office — wherever is convenient for you. A medical services company working on behalf of the insurer conducts the testing, which could include a medical exam by a physician depending on your age, the amount of coverage requested and your medical history. Arranging your test promptly after you are contacted will help speed up the application process.
This information is presented for your general guidance. Precise details, terms and conditions (including restrictions and exclusions) are set out in the insurance contract for this plan.
The Office Overhead Expense Life Insurance plan is underwritten by The Manufacturers Life Insurance Company (Manulife).
Manulife, Manulife & Stylized M Design, and Stylized M Design are trademarks of
The Manufacturers Life Insurance Company and are used by it, and by its affiliates under license.
© 2020 The Manufacturers Life Insurance Company. All rights reserved. Manulife, P.O. Box 670, Stn Waterloo, Waterloo, ON N2J 4B8.
