Protect your business against the unexpected
Businesses take out loans for many different reasons. Whether it’s to kick start the company or expand your operation, loans can provide temporary support when you need it. The ability to repay a loan normally rests with a few key people such as an owner or director. If something were to happen to those people, the business needs a policy in place to make sure there is enough money to repay any outstanding loans. That’s where Business Loan Protection insurance kicks in.
What is Business Loan Protection?
Business loan protection is put in place so that it can protect the business when a key employee, partner or owner passes away or becomes critically ill. Whether they are a guarantor of the loan or a key person that will be involved in the loan repayment, it ensures that the business can continue to run as normal in the event of their death.
What can it be used for?
If a key person within a business dies or becomes critically ill, it can have a significant impact on the company. In such circumstances, the remaining business owners may have difficulties meeting existing loan repayments. Business Loan Protection ensures that a financial amount is paid to the business should this happen. It then provides the business with an opportunity to find a solution with a lender. Whether this is to repay part of the loan or agree on another repayment plan, it can help the business to stay running as normal.
How does Business Loan Protection work?
When a business has outstanding loans such as a mortgage or director’s loan, Business Loan Protection can be put in place. Business Loan Protection is a life insurance policy or life insurance with critical illness cover that is taken out on the life of key individuals. It is set up by the business and paid for by the business. The amount of cover should reflect the amount taken out in loans and repayment amounts. Should that individual die, the business is then paid a lump sum of money equal to the amount of cover taken out. This money can then be used to help pay any outstanding debts or loans. Business Loan Protection can be used to cover substantial overdrafts, loans, commercial mortgages or director loan accounts that need to be repaid on death. They can also cover the individuals that have guaranteed the loan.
How much cover do I need?
The level of cover that you need should reflect the amount that you’ve borrowed. This is to ensure that it can all be repaid should something happen. It can also be taken out on either a level basis where payments remain the same over time or on a decreasing basis to reflect the repayments that you might make over the course of the insurance term.
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Frequently asked questions - Business Loan Protection
Please drop us a message if you have any queries. Here are the most commonly asked questions about Business Loan Protection Insurance.
Do I need Business Loan Protection?
Why do I need to insure company loans?
What does Business Loan Protection cover?
Who pays the premiums?
How much does Business Loan Insurance cost?
Is Business Loan Protection the same as Key Man Insurance?
What are the advantages of Business Loan Protection?
How do I know if I need it?
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