Business loan protection solutions

This insurance product helps you pay your outstanding overdraft, loan or commercial mortgage, in the event of a diagnosis of a terminal illness with life expectancy less than 12 months, a critical illness, or in the event of your death during the term of your policy.

How does business loan protection work?

The insurance product is written and accompanied to life or critical illness cover, on the life of the key person/s or shareholder/s carrying the debt. When that individual develops a critical or terminal illness (with a life expectancy under 12 months), become incapacitaed due to said illness or dies during the policy term, a valid claim can be made and the sum can be paid to the business.

What can the claimed sum be used for?

In the event of a valid claim, any money due can be used towards paying off an outstanding debt or loan related to the business, including; an outstanding overdraft, an outstanding loan or a commercial mortgage.

What if I am one of a number of shareholders of the business?

Where the business is a partnership, the policy will be written on an own life basis and may be placed in Trust for the other partners. After a claim is made, the sum will be paid to the business.

What are the details?
  • Minimum cover: No minimum amount of cover. Driven by minimum premium.
  • Maximum cover: No maximum sum assured for life cover only, but subject to underwriting.

    If Critical Illness Cover or Critical Illness Extra is chosen, the maximum cover per person will be £3 million if Specific Work Task definition under TPD applies, or £2 million if Own Occupation definition under TPD applies.

    For Whole of Life Protection Plan the maximum amount of cover is:

    • £5 million up to 69 years 
    • £2 million 70-79 years old
    • £1 million 80-84 years old
    • £1 million if indexation is selected
  • Type of cover: Level, Increasing and Decreasing Life Insurance cover is available. Whole of Life cover is also available.
  • Minimum term:
    1 year without Terminal Illness Cover.
    2 years if bought with Critical Illness Cover or Critical Illness Extra.
    5 years for Decreasing Life Insurance.

    There is no minimum term with Whole of Life Protection Plan.

  • Maximum term: 50 years. There is no maximum term with Whole of Life Protection Plan.
  • Minimum age: 18. The minimum age at the end of the policy is 29.
  • Maximum age: 77 for Life Insurance, 74 for Decreasing Life Insurance. 64 if bought with Critical Illness Cover or Critical Illness Extra. 84 for Whole of Life Protection Plan.

    Level Life Insurance and Increasing and Decreasing Life Insurance policies must end by client’s 90th birthday, or their 75th birthday if bought with Critical Illness Cover or Critical Illness Extra.

  • Premiums: Guaranteed. Choice of guaranteed or reviewable if Critical Illness Cover or Critical Illness Extra is chosen at outset.
  • Trusts: Policies can be placed in Trust.
  • Death in the first year: If the life insured dies within the first year of holding the policy, as a result of suicide or intentional and serious self-injury or an event where, in our reasonable opinion, the life insured took their own life, the policy will be cancelled.

What are the benefits and options?

Accidental Death Benefit:

Automatically included.

Changing Your Policy (Also known as Guaranteed Insurability Option):

Can increase cover on certain specified events, without need for further medical evidence. Eligibility criteria and restrictions apply.

Other changes:

Your client can request to make other changes to their plan. A new policy may need to be set up.

Critical Illness Cover:

Critical Illness Cover or Critical Illness Extra can be added for an additional cost at outset with Life Insurance cover.

Immediate Cover:

On request. Subject to eligibility.

Increasing and Decreasing Cover:

Increasing and Decreasing Life Insurance available.

Indexation:

Available with Whole of Life Protection Plan.

Wellbeing Support – Provided by RedArc Assured Limited:

 Automatically included. Not available on Whole of Life Protection Plan.

Terminal Illness Cover:

Automatically if life expectancy is less than 12 months unless term is less than 2 years.

Waiver of Premium:

Can be included for an additional cost.

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