When a business has loans or debtors, the ability to repay these will be hampered if a key person or director who guaranteed them becomes seriously ill or dies. Some of these loans will have personal guarantees from the directors and their family home could be at risk if the debt cannot be paid by the business.
In the event of a key person in the business dying or becoming ill, a loan may have to be repaid at short notice, and the money may not be available.
An insurance policy designed to repay that debt should the worst happen gives peace of mind, protecting the business assets, and personal guarantees of the directors.
The policy could be used for an overdraft, loan or commercial mortgage and should be for the entire sum owed that had been guaranteed by the ill or deceased director.