Many business owners overlook this benefit of owning life insurance within the business.
The financial loss of a key employee or owner can financially devastate a company and often to the point of failure.
Banks and lenders view business life insurance as a lifeline that allows the business to survive after the loss. Ultimately being able to have their loans repaid with reduced risk of default.
Life insurance on key employees or owners of businesses increases a company’s credit position within the lending community.
The bank or lender will view a company with key man life insurance as a company that would be able to afford the expenses that would remain after a key employee or owner has passed away. The company would be able to recruit and train a replacement or be able to buy out the ownership stake if necessary-keeping the bank’s loan out of potential default.
We’ve helped our client’s secure business financing and/or loans by using a life insurance collateral assignment or if that’s not required, by simply writing a cover letter explaining that the company is adequately covered in the event of an unexpected death.
For more information about using your current life insurance or obtaining life insurance to strengthen your company’s credit position, please contact us at 888-430-7668. One of our experienced independent agents can answer any questions you may have.