Loan Protection

What is Business Loan Protection?

If a key person within a business suffers a critical illness or dies, it could affect the business’s ability to repay a loan. And that could put the business itself at risk.

Business Loan Protection helps ensure that a business can repay the money owed if a key person dies or suffers a critical illness. This is particularly important for the individual who takes on the role of being a guarantor. Otherwise their estate and family’s finances could be drawn upon to repay the loan.

Lenders often make business loan protection a condition of the loan arrangement, prior to releasing funds.

How does the protection work?

Loan protection is normally arranged using a term assurance policy, insuring the life of a key person for the benefit of the business.

Before the policy can begin we’ll need confirmation from your client that the loan has been secured.

Here are some of the features of our Term Assurance plan which can be used for Business Loan Protection:

Instant Decision Online (IDO) application system, ‘virtual underwriter’ enables you to get immediate completion of a case (in some instances decisions may need to be referred).
Cover available for both Public and Private Limited Companies, Limited Liability Partnerships and individual Partners of a Partnership and also Sole Traders.
Ability to include conversion or renewal options.
Specialist team of financial & medical underwriters.
No maximum life cover.

For further information please see the key features (pdf) document.

Here are some of the facts you need to know about our Term Assurance plan which can be used for Business Loan Protection.

Criteria	Min / Max	Details	Notes
Age Limits	Min age	16	The ages shown are for the life to be insured who may be different from the policy holder. Plans can be taken out individually or jointly but the cash sum is payable on the first claim only.
Age Limits	Max age	89
Term	Min term	1 year	6 years if critical illness option with reviewable premiums are selected.
Term	Max term	50 years	50 years for Life Cover only. 50 years if Reviewable Critical Illness is chosen. 40 years if Guaranteed Critical Illness is chosen.
Payment Limits	Min monthly premium	£5	Or £50 annually. Monthly premiums must be paid by direct debit. Annual premiums can be paid by cheque or direct debit.
Maximum Cover	None	life cover only	Maximum cover is £2,000,000 with Critical Illness option. The ages shown are for the life to be insured who may be different from the policy holder.
Critical Illness Option	Min age	16	If your client chooses guaranteed premiums, the plan must end before the life assured`s 76th birthday. The maximum term of the plan is 40 years. If your client chooses reviewable premiums, the plan must end before the life assured`s 91st birthday. The maximum term of the plan is 50 years.
	Max age	59
	Max Cover	£2,000,000	This includes any other critical illness cover that the life insured may already have with Aviva and/or any other provider. If the cash sum is paid upon diagnosis of a critical illness, no further benefit is payable on diagnosis of a terminal illness or on death. Critical illness cover pays out a lump sum if the life insured is diagnosed with a critical illness that meets our plan definition and then survive for at least 14 days. We only cover the critical illnesses we define in our plan and no others.

Charges

There are no additional charges for clients to pay. All charges for our Term Assurance plan are included within a client’s premiums.

Here is some information to help you decide if our Term Assurance plan - which can be used for Business Loan Protection - is right for your client.

Designed for customers who	Not designed for customers who
Want to protect against the financial consequences of death for a defined term Have financial dependants Have creditors Want cover for a specified term	Want an investment-linked arrangement Want protection for the whole of their life Want a cash-in value Want a life insurance amount that decreases over the term of the plan.
Key considerations	Possible alternatives
Level of cover required Existing levels of cover State of health of the life assured Financial liability assessment Dependants	Self-insurance (existing assets) Whole of Life plan

We've got all the support you need

Whether you’re trying to identify potential business protection clients or you’re already selling it, you can get all the tools and support you’ll need here.

Prospecting Letters

Use our prospecting letters to help with that first step towards selling business protection products.

Trusts

Business protection policies can also be placed in trust, which could help ensure any claim proceeds go to the right people as soon as possible. For more information view Your guide to protection trusts (pdf)

Case Studies

Key Person Protection, Share Protection or Business Loan Protection? View our Client Guide (pdf) for case studies showing how different protection solutions suit different clients and how they make their decisions.

Contact us

We have a wide range of support staff available to help you. View our contact details to find that right number that meets your needs. Or call our Business protection support team on 0845 900 0818.

Business Loan Protection

Features

Facts

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Clients

Support

Charges

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