It is a requirement to have a life insurance if you want to benefit from an SBA loan. The risk of default rate is rated higher in SBA loans because they are given to small businesses that lack all the required management skills. A baker can have excellent baking skills and start a baking business but some of them will not have other necessary skills such as financial skills. When SBA analyze these factors, they find the need for life insurance as a necessity for these loans in order to protect the lender and their families. Companies like Life Ease can help you get an expedited life insurance with no exam when you need a life insurance cover for an SBA loan very fast to beat a deadline.
You should first do some research before visiting an SBA loan provider to apply for a loan. It is very common to find people who realize about some of the requirements when the deadline is very near. You should first visit a life insurance provider because it is one of the requirements for the loan. It is wise to start this process early enough because a life insurance policy can take 4-6 weeks or more before going into force. Companies that provide expedited insurance coverage can better serve you if you are very close to a deadline.
You will move forward to the actual application process after gathering or the required information. You have to give your contact information and other beneficiaries information. You will also be required to have a medical exam where you have to answer some medical questions. Insurance providers such as Life Ease don’t conduct these exams and can be beneficial if you are trying to beat deadlines.
The applicant have to visit a third party exam company for a physical examination. They will require you to provide your motor vehicle records, driving records, health records and criminal records. This process will not be complete if all the information required have not been presented. The underwriter will make the decision on whether to approve your application or decline it after assessing the risk using the information presented. Those whose application have been approved can continue into the next step of signing the agreement and paying their first premium.
Another step that is very important in SBA loans life insurance is the collateral assignment step. The collateral assignment is a simple document that should be provided by the insurance company’s legal department. How to distribute the benefits in case of death is an issue that require an agreement between the parties in a life insurance. SBA will first receive the amount you owe them in case of death and your beneficiaries will share the remaining amount according to your wish.