Disability Insurance Services

Brokers: Here's hwo Bank Loan DI: Important Business Collateral

How to explain the product:

Many banks demand or highly recommend disability insurance as a condition of business loans. However, individual disability insurance is intended to offset the insured’s personal cost of living — including the cost of his/her mortgage, utilities and food. It typically is not intended to cover the cost of a business loan. That’s where bank loan disability insurance comes in. If the policyholder becomes disabled, bank loan DI makes payments on his/her monthly loan obligation, preventing the policyholder from falling deeper into debt.

How to explain the need:

Stop and think. If you were disabled, would you be able to meet your business loan obligations on an ongoing basis? Remember, individual DI covers a percentage of your income — not all of your income. Without bank loan DI, you might be faced with choosing between paying your mortgage or paying your business loan. That’s the kind of stress you should never have to face while you’re recovering from an illness or injury. Don’t you agree that it’s smarter to be prepared with two policies to cover your two different exposures?