Business loan protection is a type of insurance specifically for businesses to help them settle any outstanding debts should one of the owners, partners, or directors pass away. It’s available to both large and small companies and has helped many during tough times. With no real end in sight to the coronavirus pandemic, business owners should think seriously about if they need this extra protection.
This does not constitute advice and advice should be sought in all instances before acting on it.
What is business loan protection insurance?
If the guarantor on your company’s loans passes away, the debt associated with them still needs to be repaid, so it’s in the best interest of your business to be protected.
Business loan protection is one of the lesser known protection insurances but it is used exclusively by companies to help pay off debts after a crucial team member dies and can be used to cover commercial debt (including overdrafts), business loans, commercial mortgages, and directors’ loans.
Many policies also include other benefits like critical illness cover, which means that your debt will also be covered if the policy holder is unable to work due to illness or injury. You might even be able to find a policy with disability insurance too, if needed.
Much like other insurance policies, the premiums will be dependent on the amount of debt being covered, but it’s hard to put a price on the peace of mind protection provides.
Importance of protection
Before the lockdown, many companies had no real plan about how to deal with debt in the event of an owner’s death despite many knowing they would undoubtedly leave some behind. It is a serious business risk to not ensure that loans and other debt have a way of being paid.
COVID-19 has highlighted this issue since many businesses are struggling and have incurred additional debt in order to stay afloat. While the government has provided schemes to help businesses, such as the Coronavirus Business Interruption Loans (CBIL) and Bounce Back Loan Scheme (BBLS), all big financial decisions should be considered as part of overall financial planning.
Build your protection plan
The events of this year have brought to light just how important it is to protect your company’s future. Doctors and dentists with their own practices are among the business owners that could benefit from business loan protection insurance. If you would like to discuss adding business protection to your arsenal and ensure you can cover all your liabilities (business and personal), get in touch with us today.
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