Business Loan Insurance
Business Loan Protection is designed to help a business pay any outstanding borrowings such as loans. Overdrafts or a commercial mortgage, should the person covered die or become diagnosed with a critical illness.
The policy premiums are pairs for by the business. It is set up to reflect the terms of borrowing and can be either on a level term or decreasing term plan.
Being unable to repay loans can be a serious problem for a business following the death of a key person.
The case study below illustrates some practical advantages by having relevant life cover and the potential tax savings:
a dry-cleaning business in Thame
The managing director George, plans to extend his business by opening a shoe repair shop next door.
In order to achieve this George needs to borrow £100,000 from a bank.
As part of the loan agreement he signs a guaranteed using the family home as security.
ABC Bank gives George £100,000 and if he suddenly dies the life assurance proceeds of £100,000 are given back to ABC Bank and the loan is then paid off.