Business Loan Insurance
Business Loan Insurance works in a similar way as Life Insurance would to cover a personal debt, such as a loan or mortgage. However, in this case, the policy is set up by and paid for by the business to provide continuity if a loan guarantor within the business was to die, suffer a terminal illness or be diagnosed with a specified critical condition.
The proceeds from the policy are used to help pay off any outstanding loans including Director loan accounts that need to be repaid upon death.
Often, investors or venture-capitalists will want to see evidence of suitable Business Loan Insurance in place as a guarantee that their loan or investment capital will always be repaid should any of the key members of the business pass away or suffer a serious illness.