Business Loan Protection Insurance | Spectrum FA Business Protection

What is Business Loan Protection Insurance?

Business Loan Protection Insurance is a life insurance policy taken out by a business to help pay any outstanding loans or other borrowings should the named guarantor die. Critical illness insurance can also be added to the policy, if this is suitable for the business.

The cover will provide a cash lump sum payment to the business in the event of the death or critical illness of that insured person, enabling the company to immediately repay any outstanding business loans secured against that individual/business.

Many businesses or organisations trading today will likely have at least one outstanding loan secured against them. There funds are often secured against a specific individual within the business – the guarantor – so it is sometimes requested that Business Loan Protection is taken out.

This could be business development loans or a commercial mortgage, but often, those loans are secured against the owners, directors or other key employees in the business.

Therefore, it is crucial your business considers in advance what the impact would be if that person were to die or be diagnosed with a critical illness.

To speak with an expert, please get in touch with us today.

Please also take a look at our frequently asked questions (FAQs) towards the end of the page.

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Contact Spectrum FA today for a free, no-obligation review with a specialist Business Loan Protection Insurance advisor.

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With our access to the leading insurance providers, Spectrum FA can source competitive insurance premiums.

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Spectrum FA provide personalised advice tailored to your particular business requirements.

How Does Business Loan Protection Insurance Work?

If your company has business loans secured against one or more people (guarantors) within its employment, you should consider taking out a policy, which is essentially a life insurance policy (to which you may, add critical illness cover) with:

  • The guarantor/s as the individual/s to be insured, and
  • You (your business) as the policyholder and beneficiary

Should one of your insured guarantors pass away or be diagnosed with a critical illness specified (if you have decided to select this optional add-on cover), the policy will pay out a lump sum to you/your company. This can then be used to fully repay any loans, mortgages, financing secured against this person or the business.

When taking out such a policy, there are many options to consider, so obtaining expert advice is critical, to ensure adequate cover is in place to be able to repay the debt in full, while making sure premiums are kept at an affordable level.

Whether you are Private Limited Company or Limited Liability Partnership (LLP) and are unsure about whether you should have Business Loan Protection Insurance or how much cover you need? Request a free review now to find out.

 

Why Do I Need Business Loan Protection?

Any business that takes out a loan of any kind will be expected to repay that loan in full, no matter what happens to the business. Therefore, if an owner or key individual were to die or suffer a critical illness this would impact on the business’ capability to repay the loan. But with this type of cover, all these fears are eliminated. Should the life insured die or be diagnosed with a critical illness – depending on the level of cover chosen – then the business will receive a lump sum payment that will clear the outstanding debt.

 

We look at all our providers 

We have access to the leading Business Loan Protection Insurance providers in the market, which allows us to recommend the most suitable policies based on your individual circumstances.

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FAQs

View some of our frequently asked questions that some of our customers have asked.

What are the eligibility requirements for Business Loan Protection Insurance?

Business Loan Protection is for any business or organisation that takes out a loan or any other form of finance, be it asset finance or an overdraft facility, whether sourced from a bank or other financial institution, or sourced privately (i.e. from one of the company directors or other private contributor). It is therefore vital for any business who has taken out a loan or finance to take out appropriate Business Loan Protection.

What is Business Loan Protection Critical Illness Insurance?

Critical illness cover is available both as a life insurance add-on and as a stand-alone insurance policy. This type of policy/policy add-on protects your company in the event of a guarantor being diagnosed with a critical/serious illness as specified within the policy’s terms & conditions.

The illnesses or conditions that are covered may vary a great deal between insurers, although most of them include a set of standard conditions determined by the Association of British Insurers, or ABI. Some of the standard conditions are:

  • Kidney failure, multiple sclerosis & stroke
  • Coronary artery bypasses & major organ transplants
  • Major heart attacks & multiple specific cancers (which will be defined within the policy)

Many policies will, however, also offer the option to cover extensive ranges of additional conditions and illnesses. Some insurers and policies may offer these ranges either as part of their ‘standard range’ or as optional extras.

Get in touch with Spectrum FA to request a free no-obligation review or learn more about critical illness or other types of business protection insurance now.

What illnesses or conditions does Critical Illness Insurance cover?

Conditions covered in addition to the ABI’s standard set mentioned above may include:

  • Aplastic anaemia, respiratory and/or liver failure (advanced stage) and/or benign brain tumours
  • Aorta graft surgery, traumatic brain injuries and/or motor neurone disease
  • Bacterial meningitis, loss of a limb (hand/foot) and/or permanent progressive supranuclear palsy
  • Replacements/repairs of heart valves, eyeball removal and/or CJD (Creutzfeldt-Jakob Disease)
  • Dementia/Alzheimer’s disease, permanent blindness, deafness and/or loss of speech
  • Cardiomyopathy, Parkinson’s disease and/or multiple (permanent) system atrophy
  • Coma and any associated (permanent) symptoms and/or primary pulmonary hypertension
  • Encephalitis, open heart surgery/median sternotomy and/or spinal strokes
  • Total permanent paralysis/disability and/or strokes accompanied by long-term (minimum 24 hrs) symptoms
  • HIV infections contracted through physical assaults, blood transfusions or work accidents
  • Third degree burns if these burns cover 20 per cent of the affected person’s face, head or other body surface areas
  • Systemic lupus erythematosus with considerable complications
  • Plus many additional illnesses

Some critical illness polices also offer the option to include other diverse illness and conditions. Please get in touch with Spectrum FA and we can offer more detailed information on this.

How much does Business Loan Protection Insurance cost?

The cost of Business Loan Protection policies depends on:

The amount of cover you need, which in turn depends on the size of your outstanding business debts (i.e. the higher your outstanding balances are, the more cover you require and the higher your premiums will be);

  • Whether critical illness cover and/or other add-ons/optional extras are selected, and
  • The conditions that will be covered if critical illness cover is included.

As with any other life insurance policy, premiums will also depend on the guarantor’s age and his/her medical history, smoker status, occupation and/or leisure pursuits.

As premiums also vary between policies and providers, finding comprehensive cover with competitive premiums can be difficult. Spectrum Financial Advice have years of experience assisting business with suitable business loan protection. To learn how, get in touch now.

Who pays for Business Loan Protection Insurance?

While cover is taken out in relation to your company’s guarantors, you would take out a policy to protect your business’ financial security and ability to carry on trading. As such, you/your company are responsible for the payment of premiums.

Why is Business Loan Protection important?

Lenders/investors must protect their own interests and make sure the loans they provide can and will be repaid – which is, of course, why they insist on loans being secured against certain individuals within a borrowing company in the first place.

With Business Loan Protection you can ensure that the necessary funds will be available if a guarantor or other key individual was to pass away or be diagnosed with a critical illness

Protecting your company against such a loss is therefore imperative. Spectrum Financial Advice have the experience and knowledge to assist you and your business. Contact us now to find out how.

Why use Spectrum FA to arrange Business Loan Protection Insurance?

Having provided advice on Business Loan Protection Insurance for many businesses, Spectrum Financial Advice are experts in this area.

Being independent, we have access to the leading insurance providers in the market, at competitive premiums. We provide expert regulated advice and will tailor the cover to match the circumstances of you and your business.

We do not charge you a fee for our advice or service and you will speak directly to an expert who will guide you through the process and handle all the paperwork on your behalf.

To find out more, please get in touch with us today to arrange a free, no obligation review. You can contact us via the contact form, by email at info@spectrumfa.co.uk, or via the phone on 01279 315 013.

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