Loan Coverage

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Loan Coverage

In most cases, when a professional borrows money from a lender to start a new business (or buy an existing one), they are required to cover the majority of the monthly loan payment with a disability insurance policy. The proceeds of the policy are assigned to the lender to save the loan from default due to a disabling accident or illness.

We offer a special policy issued by Guardian that is specifically designed for this purpose. It is called the Business Reducing Term disability policy.

Features of the policy include: (Form AH55-A*)

	80% of the monthly note payment is covered
	Flexible benefit periods from five to 30 years to cover the full term of the loan (age restrictions do apply, ask for details)
	A choice of waiting periods ( 30, 60, 90, 180, or 360 days).
	Lender is made Loss Payee on policy avoiding the delay sometimes caused by obtaining collateral assignments.
	More affordable premiums than personal disability policies which are not designed for loan coverage.

This special policy is designed specifically for loan payments. Although premiums for the coverage are not tax deductible, the benefits would be received tax free.

This important policy allows you to keep your personal and overhead disability benefits available for their proper purpose: protecting your personal income and business obligations. The benefits from this special policy do not reduce your personal or overhead disability benefits.

Guardian also offers a special personal loan disability policy to cover monthly obligations of individuals like mortgage payments.

Be sure to call Dave Richards today for information and a detailed proposal. Remember, you can also request information online through our Information Request page.

* Policy form AH55-A provided by The Guardian Life Insurance Company of America, New York, NY.