How does it work?
Now that we know what Business Loan Protection is and why it is
so essential, let’s take a quick look at how it works.
There are two kinds of cover- Decreasing cover and Level cover. Which one you choose will depend on the nature of your loan. Decreasing cover falls alongside your repayment debt and reaches zero by the time your loan has been repaid. Level cover, on the other hand, remains fixed over time and is therefore usually used to cover interest-only loans, where the principle capital is not repaid until the end of the loan. Level cover ensures that the outstanding loan balance is always covered, right until the loan term’s end.
It is important to investigate the right cover you need to cover the loan’s terms, especially for joint loan applications. If you and a business partner are jointly liable, it is best to get a single policy written on a joint life, first-death basis. This covers the entire loan if one party dies or becomes critically ill. However, if multiple key people share responsibility for the loan it may be best to create individual policies to cover different individual’s liabilities especially if all parties are not of a similar age or state of health. Check out out loan cover calculator here and work out what you should cover.
How much does Business Loan Protection cost?
The cost of business loan protection insurance really comes down to the
individuals that are going to be insured along with the amount of cover
All businesses do well to keep their overhead costs well managed. However, the peace of mind and operational protection that Business Loan Cover offers is more than worth the negligible monthly cost of your premium.
Premium costs depend on the age and health of the policy holder(s) as well as their position’s inherent risk factors. For a 35 year-old entrepreneur, premiums may be as little as £5.91 a month. A small price to pay for the potential value of the cover.
Whatever the nature of your business or the intended purpose of your business loan, make sure that you have the right cover in place to protect your enterprise.
UK’s Number One Business Protection Specialist.