|Life Insurance Assisting With Business Loans|
Can Life Insurance Help You Get That Business Loan?
Most businesses run on credit, or at least ready access to it. Without credit at reasonable rates, many businesses would find it nearly impossible to carry out expansion plans or get through times of tight cash flow. That’s one reason businesses watch interest rates so closely. A lower rate usually means better access to more credit at lower rates.
Life insurance may be a player in the credit game. When banks evaluate a loan application from a business client, they frequently take into consideration whether a key employee in that business has life insurance. In the event that the employee’s loss causes a business disruption, the life insurance could serve as a means of secondary collateral. In a sole proprietorship or other closely held business, a life insurance policy can possibly be a deciding factor to the bank as to whether or not to grant the loan. The chances for obtaining a loan approval may be enhanced if the business itself is named as the policy beneficiary.
How Can a Life Insurance Policy Help Your Business?
A life insurance policy can help in the following ways:
May make a lender more willing to grant credit or a loan.
Which Insurance Is Right for You?
Term is often used, especially when:
However, term life insurance has its drawbacks:
Many Business owners Opt for Permanent Life Insurance
1. Once you buy it, you can keep it for life, as long as you pay your premiums. The death benefit protection is with you for life as long as you pay your premiums. With term coverage, on the other hand, there is always the risk that the term insurance will expire and you may become uninsurable as you get older. Then you might not be able to purchase insurance, which can compromise your access to credit.
The Reality of Business
Business relies on credit, and life insurance can sometimes help you get that credit. For more information on how life insurance can help your business and family, please contact Eddie Diaz, President, Diaz Strategies Insurance and Financial Solutions (480) 840-2165.