original post 11/2014, updated 3/2019
Wouldn’t it be great if everyone who needed business life insurance was a life insurance poster child? No health issues. No family history issues. No past drug or alcohol problems. Unfortunately those in need of business life insurance, whether for a business loan collateral requirement or for key person insurance for the CEO or another executive, are sliced right out of real life.
What if You Are Declined for Business Life Insurance?
A significant percentage of people are declined for life insurance through a traditional company using traditional underwriting. Sadly, those of us who need life insurance, really need it. In business, however, the business life insurance is often a requirement for employment.
In a lot of situations, such as when someone has gone through prescription drug or alcohol abuse treatment, their only avenue to approved life insurance is time passed from the treatment. Depending on the situation it could be a few years before traditional life insurance companies will entertain any kind of an approval and my goal with all clients is to reach that point.
What often happens though, is the owner, CEO, or partner will become aware of a requirement for life insurance. They then apply for the life insurance. Most times, but not all times, aware of their road block, and find their impairment quickly leads to a decline, and then another, and the deadline to provide the policy starts looming. In a lot of cases it would seem prudent to just go to the bank, the board of directors, or the other party in a large business merger and just confess that it will be some years before you can provide that life insurance they require, but you promise to keep working on it until it is in place.
Your Personal Information Can Then Put Your Position in Risk
What sucks the prudence right out of that idea is that it may mean giving personal information that may cast doubt on your character, right or wrong. A bank, not unlike a life insurance company, may want to put things off until they’re sure that there is no relapse in substance abuse. It could be that admitting that you are HIV positive to your board of directors, and that can become one of those things, right or wrong, that might cause friction and your lack of ability to get business life insurance.
It can even be perceived as a breach of trust. It could be that your inability to provide life insurance to the other party in a merger situation because of because you are recovering from cancer just makes the whole deal, a deal that depends on you being there or life insurance, if you’re not there prematurely, isn’t an acceptable risk.
Where Do You Turn When You Can’t Get Required Business Life Insurance?
Where do you turn when a business situation is spiraling out of control, or is headed for the dumpster, because you can’t get the required life insurance? What do you do when you’ve wasted months trying several different life insurance companies and been declined so often that you start believing that you are dying, when you know you’re not?
There is a place to turn, a company that doesn’t offer personal insurance, but does approve business life insurance in all of the situations I’ve mentioned. There is an answer and to make it even better, they are able to underwrite, approve and place a policy in force in as little as 4 to 5 business days. And, they do it at reasonable rates! Too good to be true? The answer is no. I have dozens of clients from all over the world that have benefited from the business life insurance expertise of these two companies.
They have been able to deliver a life insurance policy underwritten by one of the biggest names in the business at the time of loan closing. They have been able to take control of their future by dropping that new life insurance policy on the desk of the president of the board without divulging the issues that could have needlessly injured the trust. When asked to provide life insurance in favor of their partner in a buy/sell situation, they can just make it happen.
Remember, this is only about business life insurance, that safety mechanism that allows large amounts of money to move and fund growth and ensure that a premature death won’t take a company or a business deal south. If you have questions or have your back against the wall because you’ve been declined for business life insurance, call or email me directly. My name is Ed Hinerman. Let’s talk.