Business Loan Protection
Business loan protection insurance will provide funds to repay a loan, commercial mortgage, or a director’s loan if one of the business owners dies or suffers a critical illness.
Your client can protect the full loan or mortgage amount with life cover, or life and critical illness cover. When they make a claim, the sum assured is either paid to the business or directly to the lender if the policy has been assigned.
Why it's needed
Many businesses take out loans to start up a company or to expand their operation. And their ability to repay often rests on a few key people. Insurance helps to pay an outstanding loan if any of those key people were to become critically ill or die.
What it covers
Most types of business loans can be protected, including:
- Commercial loans and mortgages
- Venture capital loans
- Director’s loans
- Personal guarantees
Things to consider
Before you arrange business loan protection cover, it’s important to understand each individual’s liability. Under the terms of a loan, owners may be jointly liable, severally liable, or jointly and severally liable for the repayment of the loan.
Once this information is clear, you can set up a suitable policy for anyone responsible for the repayment of the loan. A loan protection policy can be taken out to ensure repayment of a business loan in the event of the death or critical illness of a shareholder, partner, member, director or sole trader.
You can select a decreasing or fixed sum assured, but the term of the cover needs to match the term of the loan.
We have a dedicated specimen business trust document. We cannot advise on whether putting any particular plan into a trust would be suitable for the client’s particular circumstances and would recommend they take professional legal advice on the suitability of these specimen documents.
Making a claim
When a claim is made, the proceeds are paid to the policy owner, who can then decide to pay off the loan in full or to continue repayments according to the initial agreement.
If the policy has been assigned to a lender, we make things simple by paying them the claim proceeds directly.
Smart Health
From on-demand consultations with UK based GPs to second medical, our Smart Health service is a convenient way to connect your clients to tools that help them manage their health and wellbeing. It’s available 24/7, 365 days a year, anywhere in the world and can also be used by their partners and children up to age 21, all at no additional cost.
Smart Health is a non-contractual benefit that could be changed or withdrawn in the future.
Literature and support materials
Business Protection Adviser Guide
This Business Protection guide helps to support and streamline your advice process.
Reasons why - Business Protection
A handy guide to provide an example of what a ‘reasons why’ letter could look like.
Critical Illness for Business - Cover Details
Read our Cover Details for an explanation of how AIG's Business Protection - Critical Illness with Term Assurance product, works.
Critical Illness for Business - Key Facts
For more information on AIG's Business Protection - Critical Illness with Term Assurance cover, visit our Key Facts.
Critical Illness for Business - Cover Details
Read our Cover Details for an explanation of how AIG's Business Protection - Critical Illness with Term Assurance product, works.
Term Assurance for Business - Key Facts
Get into the detail on AIG’s Business Protection with Term assurance cover with our Key Facts document.
Business Protection - Quick reference guide
This document is a snapshot of our Business Protection offering. Get an overview of the types of cover on offer, how to determine a cover amount, features and benefits and those all-important tax considerations.