DI Insurance

How To Best Cover New Business Loans

By September 27, 2021 No Comments


A 34-year-old general dentist was purchasing an established dental practice from his retiring mentor. 

  • For the purchase, he sought out a new practice loan from a large bank.
  • As part of the many closing requirements of the lender, he was instructed to acquire and assign disability insurance benefits to financially indemnify the loan repayment.


The dentist had a financial planner who recognized that the dentist would want an Overhead Expense policy with a business loan expense rider.

A policy was secured for $10,000 of benefit to reimburse the dentist for fixed business expenses if they became too sick or hurt to work.

This making it possible to keep the business going while recovering from a disability. 

In addition, the policy had a $5,000 business loan expense rider that matches the terms of the loan with a benefit assigned to the bank. This solution is better than assigning a personal disability income benefit to the bank. It’s less expensive, provides the flexibility to exactly match the loan terms, and allows the dentist to keep his personal disability insurance and protect his income.

The bank was happy and the dentist has his new practice protected if he would ever become too sick or hurt to work.

Abby Rediger, MBA
DI Marketing Consultant

Any Questions?

Please contact me at 877.455.0119 x231 or email me at arediger@fpgonline.com.