Is Business Loan Protection Compulsory?

We have taken out a sizeable business loan and I am wondering whether it is mandatory or just best practice to protect the outstanding debt?

Question asked by Claire Cook
Compare Top 10 UK
Takes approx. 60 seconds
Type of Cover
Level of Cover
Date of Birth
Loading your options...
Thank you for using our Quote Tool
If you need some help, just call us!
T: 02074425880
Our in-house Experts are here to provide Whole of Market Advice!
Our Experts can answer all your questions
Our Experts can send you more appropriate options based on your personal circumstances

Very important if you are either Self-Employed or a Company Director.

Our online quote tool is good but our Experts are better

Oue Experts have access to far more insurers and can often find a better deal offline.

Saves you time, let our Experts do what they are best at

Answered by Tom Conner

Many thanks for your question.

Many banks will require Business Loan Insurance (usually in the form of a Keyman Life Insurance policy) before agreeing to make a business loan. Essentially they want to make sure their loan can be repaid if you pass away.

Although some banks are very strict on this there is sometimes room for negotiation.

For instance, a lender may start off by saying that every director needs to be covered for the full loan amount but I know of some banks that have then conceded to allow the sum to be split between the directors. With some banks it seems to work on a case by case basis.

I hope that helps. Please feel free take get in touch for quotes or further information.

It’s always worth asking an independent insurance adviser for quotes rather than going with the cover offered by the bank. This is because the bank may be tied to a few or even just one insurer, limiting the scope of their search and potentially not finding you the best deal.

business loan insurance
keyman life insurance
limited company
This information does not constitute financial or other professional advice. You should consult your professional adviser or contact us directly on 02084327333 should you require financial advice. It is important to ensure any insurance policy you take out is suitable for your needs.
Compare Top 10 UK Business Insurers

Frequently Asked Employee Benefits Questions

I am a director of my own limited company and have been considering life insurance and came across Relevant...
I’ve recently changed jobs and my new employer has said they’ll sign me up for the company...
I keep hearing people talk about key man insurance but what does it actually cover and what is...
I’m considering rolling out Group Critical Illness Cover for my employees across the company....
Need Help? Live chat now and get an instant answer from our Experts...


Our Latest Reviews
Trevor Massey

Excellent service from start to finish. Both Jack & Jake were both helpful and polite through the process. I would recommend Drewberry to family and friends.

Robin Condliffe

Victoria Slade has been consistently prompt, personable, efficient and a great communicator. It is the first time that we have had straightforward dealings with financial services since becoming qualified doctors 20 years ago. Well done!

Adriana Fouche

Oliver was great at explaining things, with patience. He called back when he said he would, and spent a lot of time to make sure the policy meets my needs.

We are rated 4.9/5 based on 2033 independent client reviews.
To read more of our independent client reviews click here →
4.92 / 5 Average
2033 Reviews
Mr B
Overall Rating
Excellent customer service and I'm delighted with my new insurance policy.
Overall Rating
Victoria Slade has been consistently prompt, personable, efficient and a greta communicator. It is the first time that we have had straightforward dealings with financial services since becoming qualified Drs 20 years ago. Well done!
K Szymkiewicz
Overall Rating
Rauri Taylor is Independent Protection Expert who you want to help you with any Pensions, Investments & Insurance. He helped me made right choice.
S Brocklehurst
Overall Rating
Professional service, Oliver seemed genuinely interested in getting the right product for me. I was given plenty of options and everything was described fully when required. I felt no pressure to purchase a product.
G Bigga
Overall Rating
Helpful, knowledgeable and efficient and able to find great prices. I would highly recommend