What is Business Loan Protection?
When a business borrows money from a bank or other financial institution, it is common that the business will want some form of protection cover to repay all, or some of that loan on the death of a key person. In particular the loss of the person(s) who have guaranteed a loan can be a serious concern for a business.
It could also be that the business owners have lent money to their own business. These are called directors or partnership loan accounts and need to be repaid on death.
Business Loan Protection helps you pay an outstanding overdraft, loan, commercial mortgage or director's loan should the guarantor or key person die or become terminally or critically ill.
Business Loan Protection is life assurance (sometimes life assurance and critical illness cover) written on the life of an individual or individuals. When a valid Business Loan Protection claim is made, a sum equal to the outstanding debt could be paid to either the business or directly to the lender, to allow any borrowing to be repaid.