Case Study Snapshot: Business Loan Failure to Survive

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A young dentist was attempting to purchase the thriving dental practice of an aging colleague.  The cost of the practice required the young man to take out a business loan from a commercial lender.  One of the pivotal closing requirements of the lender was a $1,200,000 life insurance policy on the young dentist with a collateral assignment of benefits to the lender.

Unfortunately, the loan guarantor was afflicted with marginally controlled Type I diabetes, and the life insurance company was postponing the placement of the coverage for six months until the client’s labs had improved.  However, the lender wasn’t willing to budge on the death benefit requirement and was threatening to cancel the loan which would have obstructed the practice buyout.

The client contacted Petersen International, and we were able to provide him with a five-year-term Business Loan Failure to Survive policy, providing a death benefit that satisfied the lender’s requirement.  The dentist was able to close on the loan in a matter of days, and he was able to successfully proceed with the purchase of his colleague’s dental practice.