Assignment of Life Insurance as Collateral

I made this video to provide tips for anyone seeking to get an assignment of life insurance as collateral.

Transcript: Assignment of Life Insurance as Collateral

If you recently applied for a business loan, especially an SBA loan, you might need to get a life insurance policy. In this video, I'm going to give you some tips.

So you may have recently applied for a loan, especially a loan through the SBA, the small business administration, and didn't realize that one of the requirements would be for you to have a life insurance policy. This would be so that if something were to happen to you, the SBA or the lender would get their money back on the loan. Makes sense. So what are some tips, what are some things you can do to speed up the process. Most business owners that I meet want to get that loan in place as soon as possible. So if you are in that situation what I'd recommend is look for a no medical life insurance policy. With a no medical life insurance policy the underwriting time is much faster.

Let's talk a little bit about the underwriting process. The underwriting process with a traditional life insurance policy requires you to get a medical exam. The insurance company very well many times orders your doctor's records. This can take anywhere between a month, and sometimes two months. Sometimes I see it go even longer if the doctor takes time to get your medical records to the insurance company. So this can certainly be a lot of time, and time is money in your business. So what are some options?

Well, one option is to get a no medical life insurance policy and there are some insurance companies out there that can approve you in as little as one to two days, you get your policy and the pricing is still very very competitive.

The other type of policy you can get where the prices are a little bit better is a no medical life insurance policy, that doesn't require a physical exam but the insurance companies will still go to your doctor to get records. This will keep your costs lower than the one to two day policy, but the underwriting time will be still less than a traditional policy. The underwriting time is usually 3-4 weeks instead of possibly six weeks so you're going to get your policy still faster, and you're going to be able to save some money.
If time is not a factor than having a physical and going through the full underwriting process will be your best best, because that's going to be typically your least expensive option. So typically when people are getting loans from banks they're not for a very very long time, so people are typically looking for 10 year term polices, so that's what I would advise you to get because that's going to cover the amount of the loan.

What you would do is, you would do something called a collateral assignment policy, which I would help you do. What does that mean? That means that once you get your policy, I help you fill out a form with the insurance company which will put that policy as collateral for the loan, and that will fulfill the bank's requirements. So I will help you through the process of fulfilling the bank's requirements so that you can get your loan. I have experience working with people that are looking for life insurance specifically to cover a loan, and so if you are in that situation, visit the site and fill out a quote request form and I can help you get a life insurance policy which will satisfy the bank's or the lender's requirements, or the SBA's requirements so that that policy could be collateralized for your loan and then you can get approved for your loan as soon as possible. I look forward to speaking with you. Thank you.

Author: Liran Hirschkorn