Don’t Waste Personal DI Benefits on Business Loans
The Small Business Administration and countless non-governmental, commercial banks lend billions of dollars in capital to tens of thousands of American professionals every year. Those professional men and women are your clients and your business prospects, and many make the serious mistake of assigning personal disability policy benefits to lending institutions in cooperation with business loan agreements.
Most lenders require those loans, no matter large or small, be partially or fully insured in case of the disability of the borrower. Insurance demands are a regular part of every business loan agreement. But don’t let your clients fall into the common, yet potentially devastating trap of sacrificing personal DI benefits to financially indemnify a loan requirement.
Many borrowers, naïve to the options available in the market, find it cost-effective to collateralize individual disability insurance benefits or even overhead expense benefits to address the lender needs on a business loan. This is an absolute folly.
As an insurance advisor, you prescribe your clients disability insurance to protect their incomes. Those benefits are earmarked for the replacement of earnings to cover life’s most fundamental of expenses – food, clothing, mortgage, home utilities, child education, medical emergency costs that fall outside of healthcare benefits, transportation expenses, insurance premiums, etc. Personal DI benefits are not marketed for nor designed to indemnify business loans.
Business overhead expense disability policies also have a specific purpose completely separate from loan indemnification such as covering payroll, employee benefit costs, taxes and business utilities. Furthermore, BOE policies have benefit periods limited to 12 to 24 months which is hardly appropriate for most business loans.
So how do your clients effectively and affordably acquiesce to lender requirements of disability insurance without tapping into their personal DI resources? The answer is Loan Indemnification Disability Insurance.
Petersen International offers a long-term “own occupation” disability plan designed specifically to cover up to 100% of the financial exposure of a funded loan. The Petersen plan includes monthly and lump sum benefit options to properly indemnify loans of any term length, size and structure. Most importantly, the program is made available in excess of any group or individual personal disability policies.
For years, Petersen’s loan indemnification program has been integral to the private practices of physicians and dentists and veterinarians, covering the payments of their expensive equipment loans, practice buy-outs and building loans. This type of coverage is also the perfect solution to cover start-up costs for new business owners throughout many industries.
Call Petersen International at (800)345-8816 to find out more about Loan Indemnification Disability Insurance, and how your clients can insure their business loans and satisfy lender requirements without having to raid the important disability benefits that will one day be used to take care of their families and everyday living if the worst should happen.