What it is
Bank loan disability insurance covers policyholders if they become disabled. The bank loan disability insurance benefit makes payments on a business owner’s monthly loan obligation, preventing the owner from falling deeper into debt.
How to explain it
Many banks demand or highly recommend disability insurance as a condition of business loans. While most business owners should have individual disability insurance (IDI), it 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.
When to offer it
Bank loan disability insurance should be offered to any business owner who has a bank loan. Keep in mind that these business owners should also have other disability insurance products including individual disability insurance, business overhead expense disabil
ity insurance and possibly key person disability insurance.
Suggested Resources


