Business Loan Protection Insurance – Covermate Life

Running a business often means taking on loans to fund growth, purchase equipment, or manage cash flow. But what happens if illness, injury, or even death prevents you (or a key person in your business) from meeting those repayments?  That’s where Business Loan Protection Insurance comes in.

At Covermate Life, we are a general life insurance broker working with multiple insurers including AIA, MLC, MetLife, TAL, Zurich, OnePath, and ClearView. This allows us to compare a range of cover options and help you understand what’s available.

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What is Business Loan Protection Insurance?

Business Loan Protection Insurance is designed to cover outstanding business loan repayments if the person responsible for the debt cannot work due to sickness, injury, or death.

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It ensures your business can continue to meet its financial obligations, protecting both the company and any personal assets that may have been used as security for the loan.

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What Does Business Loan Protection Insurance Cover?

Policies may cover:

• Regular loan repayments (principal and interest)

• Lines of credit or overdrafts

• Business equipment finance or leases

• Commercial property loans

• Guarantees secured against personal assets (e.g. the family home)

This helps avoid defaulting on loans or having to sell assets during a difficult time.

Who Should Consider Business Loan Protection Insurance?

This cover may be suitable for:

• Small business owners with secured or unsecured loans

• Partners or directors who have taken on personal guarantees

• Businesses with large equipment or property finance

• Professionals relying on loans for practice set-up or expansion

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Benefits of Business Loan Protection Insurance

• Protects your business assets and reduces financial stress

• Prevents disruption to business operations if you can’t work

• Reduces the risk of creditors calling in debts unexpectedly

• Complements other cover types like Key Person Insurance or Buy-Sell Insurance

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Why Use Covermate Life as Your Broker?

As a general life insurance broker, Covermate Life does not represent a single insurer. Instead, we:

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• Compare multiple providers on your behalf

• Explain policy differences, exclusions, and costs

• Provide general advice only – we don’t consider your personal financial situation, but help you understand the available options

• Give you more flexibility and choice than going direct to one insurer

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Frequently Asked Questions 

Is Business Loan Protection Insurance the same as Loan Protection Insurance?
They are similar, but Business Loan Protection is specifically designed for loans taken out by businesses, while standard loan protection may cover personal loans or mortgages.

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Can Business Loan Protection Insurance be tax deductible?
In many cases, premiums may be deductible if the loan is used for income-generating purposes. Always confirm with your accountant.

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What happens if a business partner dies?
Loan Protection Insurance can help cover their share of business loan repayments, preventing surviving partners from being left with the full debt. It may be used alongside Buy-Sell Insurance.

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Do banks require Business Loan Protection Insurance?
Some lenders may strongly recommend it, especially if loans are large or personally guaranteed. While not always mandatory, it can safeguard both the business and guarantors.

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Does Covermate Life provide financial advice?
No. Covermate Life provides general advice only. We help explain the available insurance options and compare insurers, but do not tailor advice to your individual financial situation.

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General Advice Disclaimer

The information provided on this page is of a general advice nature only and does not take into account your personal objectives, financial situation, or needs. You should consider whether the product is appropriate for you and review the relevant Product Disclosure Statement (PDS) before making any decisions.