This is a step above, maybe several steps above your spouse suggesting that it is time for you to get life insurance. You should listen to your spouse because this is usually an awkward subject to bring up which means something important has triggered the request. Well, and you should just listen to your spouse anyway.
Then there is business life insurance. Whether it is for collateral on a loan for your business, or the board of directors has told you to acquire key man insurance to cover their interest in the great job you’re doing, or a partner who has upheld their end of providing life insurance to fund a buy/sell agreement, there is generally a time frame that needs to be met. When your banker of the SBA says they need a business life insurance policy in force to be collaterally assigned for a loan, they aren’t suggesting that when you get to it is fine. Without exception they mean they need an approved policy in force and collaterally assigned by the closing date of the loan if not a few weeks before.
Not meeting that closing date deadline can have kind of dire results. I know in my experience that when you delay a bank and/or the SBA because you are having trouble meeting a deadline they look at that with at least some discomfort. Of course they aren’t in your shoes and aren’t necessarily in tune with your challenges which could be anything from dragging your feet (that is their assumption), to having an impairment that is particularly difficult to underwrite, to having a doctor who would rather have a hot stick poked in his eye than release your medical records in a timely manner. Especially for these loan commitment deadlines we have access to business life insurance through the world’s largest business insurance provider, Lloyds of London. They can cut through the red tape and have a policy in your hands within a week of applying and have it collaterally assigned as quick as the bank can sign the form.
While Key Person business life insurance generally doesn’t have as tight a deadline, explaining to your partner that already has their half of a buy/sell agreement funded why you can’t seem to get your half wrapped up can be a little disconcerting. Again this could be the fault of a doctor who’s dragging their feet or it can be something as delicate as being HIV+ and having a hard time finding business life insurance. We have companies that underwrite virtually all impairments so if you haven’t been able to get approved for the life insurance you need, well, you probably have the wrong agent that has been working with the wrong companies. We can get your files in front of the best underwriter for your situation and, again, we have Lloyds as a backup to put the needed coverage in place until we can find a traditional route to approval.
Bottom line. Maybe if our spouses were as demanding as business interests more of us would get our life insurance needs wrapped up when we should as opposed to when we get around to it, but don’t let your business relationships go unprotected. If you have questions or are in a bind for business life insurance, call or email me directly. My name is Ed Hinerman. Let’s talk.