What the stress test shows
Buying a practice adds two fixed costs that don't stop when you do: the loan payment and the overhead. The stress test adds those to your personal bills, subtracts the revenue that keeps coming in without you, and runs the numbers month by month for six months.
You see two scenarios side by side: protection later, with only your cash reserve to fall back on, and your protection, with the disability and overhead expense coverage you have now. A chart shows the month the cash runs out, if it does.
Why six months
Hand, wrist, back and shoulder injuries, surgeries and many illnesses can keep a dentist or physician out of clinic for months, not weeks. Six months is long enough to use up a typical cash reserve, and it's the stretch when a new practice is most exposed: patients are still getting to know you, and the seller has usually left.
Disability vs. overhead expense insurance
They cover different things. Disability insurance pays you personally, for your own bills. Overhead expense insurance pays the practice's fixed costs, such as rent, staff wages and lab bills, so there's a practice to come back to. Both start after a waiting period, and both are easier to arrange before you sign, because coverage depends on your health when you apply.
Common questions
What counts as practice overhead?
The fixed costs that keep the practice running whether or not you're seeing patients: rent, staff wages, lab bills, supplies, utilities and equipment leases. The loan payment is entered separately.
What revenue keeps coming in while I'm away?
Production that doesn't depend on you personally, such as hygiene and any associates. If you're the only provider, this may be close to zero.
What is a waiting period?
The number of days between becoming disabled and your first benefit payment. Overhead expense policies often use shorter waits, such as 14 or 30 days. Disability policies commonly use 30, 60, 90 or 120 days.
Is this a quote or advice?
No. It's an educational estimate based on the numbers you enter and simplified assumptions. It doesn't model taxes or policy definitions. A free 15-minute review can check it against your actual deal and coverage.