Benefits of the Loan InsuranceBusiness loan insurance offers many advantages to the business, its owners, and employees. Some of the benefits a company can get from obtaining a loan insurance are:
- protection of the business’ future financial risks
- supply of financial resources during emergency cases
- maintenance of support for the economic needs of the owner/s’ family members, business partners, and workers
- availability of funds to repay the outstanding loan balance owed to business lenders
- Life insurance protection – Upon the business owner or key person’s death, most insurance policies provide up to one million dollars of coverage to pay back the company’s loan debts. Some plans provide early death benefits to people who are diagnosed with terminal disease and have only a few months to live.
- Disability insurance protection – In cases where the company owner is physically or mentally incapacitated and does not have the capability to render his duties and responsibilities to run the business, insurance plans cover some percentage of the loan repayment up to a specific period of time.
- Accidental dismemberment insurance protection – This insurance plan coverage is for individuals who have severe injuries due to accidents. The insurance provider usually disburses a certain amount of funds to pay off a portion of the loan. Some insurance policies include this type of protection with the life insurance coverage plan.
The health condition of the person applying for any type of protection under the business loan insurance will be assessed by the insurer’s representative. The age, gender and healthy lifestyle of the individual will affect the amount of the monthly premium. Younger applicants and are non-smoker are usually charged of lower premiums compared to older and smoking applicants.
Advantages to Beneficiaries
Aside from the business as beneficiary of the loan insurance, other recipients mentioned on the policy like a family member of the insured may receive money once the loan has been fully repaid and there is some amount of the proceed fund left.