Getting a loan for your business could be life changing. It can help you with flexibility, growth opportunities, increase your cash flow and many more things.
But, in order to get an SBA loan, you need to have protection for your business and that protection can come from a life insurance policy. A common question asked by people who want to go through the process of getting an SBA loan is what kind of life insurance they need in order to secure the loan.
If you have whole life insurance already, and it covers the full amount of your potential loan, you could easily use that to secure an SBA loan. However, if you don’t have an existing policy and you’re looking to get one, the best option would be to get a term life insurance policy.
So in short, when it comes to securing an SBA loan, you want to make sure that you have enough coverage for the full value of the loan. If you don’t have an existing policy or if your current policy doesn’t cover the whole amount of your potential loan, then a term life insurance policy is the best option.
Why You Should Consider Taking Out Another Policy For Your SBA Loan
Let’s say you already have a whole life insurance policy in place and it covers enough of the loan amount. While this is great, you should consider taking out another policy to cover your SBA loan. The reasoning is simple. If something happens to you, your original life insurance claim should go to your family and not to the SBA. This is probably the reason you took out life insurance in the first place, and it’s important to keep that goal in mind.
By taking out a separate term life insurance policy for your SBA loan, you can protect yourself and your family while also making sure the SBA is covered if something were to happen to you.
Why Exactly Is Term Life Insurance The Best To Use As Collateral For An SBA Loan?
Term life insurance is the best to use as collateral for an SBA loan because it’s the most cost effective way to get enough coverage. It also gives you the ability to customize your policy so that it fits both your budget and the requirements of the loan.
The biggest benefit is that term life insurance policies are much less expensive than whole life insurance policies. However, there are multiple types of term life insurance including renewable year term, the decreasing term policy, and last but not least, the level term policy.
Which Version Of Term Life Insurance Should You Choose?
When it comes to choosing the right type of term life insurance for your SBA loan, level term life insurance is the most popular choice. Below we will go over the reasons why:
- Level term life insurance provides a fixed amount of coverage for a set period of time. This makes it ideal because you know what exactly what your coverage is and for how long.
- It also allows you to customize the policy so that you can get enough coverage to meet the requirements of your SBA loan.
- The rates of a level term life insurance policy don’t change for the duration of the policy. This makes it much easier for you to keep up with your payments and predict how much you will be paying each month. It also ensures that your coverage remains consistent over time.
It’s not that straightforward for some people, as some pre-existing medical conditions could make it difficult to find a policy. But, with the help of an insurance broker, you can get the coverage that you need for your SBA loan without breaking the bank.
Best Life Insurance Plan To Get With a Pre-existing Medical Condition For An SBA Loan?
Level term life insurance is the best option for people with pre-existing medical conditions when it comes to getting an SBA loan. It’s the most affordable type of life insurance and it will provide you with enough coverage for your loan.
What Do You Need To Do In Order To Secure a Term Life Insurance Policy With A Pre-Existing Condition
If you have a pre-existing medical condition, the first thing to do is speak with an insurance broker. They can help you find a policy that meets your needs and budget. You’ll also need to fill out an application for the term life insurance and go through any necessary underwriting processes.
Here are some tips for applying with a pre-existing condition
- Be honest about your condition.
- Show you’re working hard and staying on top of your condition.
- Include all the details of your medical history.
- Make sure to include any medications or treatments you are receiving.
- Get a copy of your most recent health exam results.
- Shop around and compare quotes from multiple companies.
- Ask questions and make sure the policy will meet your needs.
If you follow these tips, you should be able to find an affordable term life insurance policy with a pre-existing medical condition that meets the requirements of your SBA loan.
Best Way To Get Life Insurance For Your SBA Loan
For those seeking the best life insurance rates, turn to CFA Insurance. They offer a convenient quote comparison system to find top providers’ rates with just one click, and there’s no obligation to buy. CFA allows you to compare options and find the best deal without pressure, and potentially save 58% on your policy. Visit their website now to start.
Life Insurance For SBA Loan
When seeking life insurance for your SBA loan, consider LifeinsuranceforSBAloan.com. Their three-step process is designed to make the experience as easy and stress-free as possible. Simply fill out their quote form or call for a more personal touch. They’ll work with you to get approved for a policy within one day, including the collateral assignment form, and handle the recording process in just 5-7 business days.