It’s a normal situation when to start their own business or develop the existing business people borrow money. But what if a self-employed person for the health reasons is not anymore able to work and earn an income? Who will cover their loans? Loan insurance is a perfect choice for the self-employed, the key to their financial security.
Would your business be put at risk if you became injured or disabled? Would you need to use your personal savings or other assets to help pay off your company’s business loans? If you are self-employed, you should give loan insurance some serious thought, especially if you don’t have disability insurance. Loan insurance covers your debts if you are unable to work due to illness or accident. The benefits are not taxable and can be used to cover all sorts of debts made for business purposes:
- Lines of credit
- RRSP loans
- Personal loans
- Car loans and leases
- Any other long-term loans with regular payments
In the event of disability, a cancer diagnosis or death, loan insurance helps pay off any loans that a self-employed person has made. Moreover, getting the insurance is easy: in most cases, you simply have to answer only a few questions.
Generally, loan insurance has the following features:
- Life insurance coverage: if you die the loan insurance pays off the insured balance of your loan
- Life insurance coverage: if you are diagnosed with a critical illness such as cancer the loan insurance pays a lump sum to help you cope financially
- Life insurance coverage is up to $1,000,000
- Disability insurance coverage: If a disability prevents you from working, the disability insurance coverage provides up to $7,000 per month towards loan payments
- Accidental dismemberment coverage: Included with your life insurance at no additional cost, this coverage pays up to $50,000 against outstanding loans if you suffer an accidental dismemberment
- Premium calculated based on the loan balance, so you pay a fair premium for the real risk your loan represents
- Insurance benefits can be paid for as long as the total disability persists or until the loan is completely repaid.
Some loan insurance plans offer psychological, convalescence, estate settlement and legal assistance. Bottom line, business loan insurance plan provides the extra financial security your business needs during a difficult time, while also protecting your family.