Can You Get Life Insurance With An SBA Loan If You Have Diabetes?
SBA loans are an alternative funding source for businesses that don’t have access to traditional funding.
An SBA loan could be a very big boost for your business as they offer generous term lengths, caps on interest rates, predictability, and more. In order to get an SBA loan, the SBA requires you to get a life insurance policy in order to protect their investment.
Unfortunately, if you have diabetes, getting a life insurance policy to serve as collateral for your SBA loan can be difficult. So can you get life insurance with an SBA loan if you have diabetes?
In most cases, you could get life insurance for an SBA loan even with diabetes. However, there are some things you should know. If your diabetes is bad, or you have other medical conditions, it may be more difficult to get life insurance. Also, the premiums for your policy will likely be higher than if you did not have diabetes.
As long as you could create a policy that covers the term of the loan and the amount of the loan, you should be able to get life insurance for an SBA loan.
Is There a Specific Type Of Life Insurance You Need With Diabetes For An SBA Loan?
There is no required type of life insurance that you need to get with diabetes, so the decision of which type you should get depends on the best option for you. The two options are Term Life Insurance and Whole Life Insurance.
Term Life Insurance is the most popular option, as it provides coverage for a set term of usually 10, 20, or 30 years. This could be beneficial if you get an SBA loan for a short-term period so that your life insurance policy does not need to last longer than the loan itself.
Whole Life Insurance is an option that provides a death benefit your entire life, as long as you keep up with the premium payments. Whole life insurance policies for an SBA loan is unnecessary due to the fact that term life insurance could cover the term of the loan. Also, whole life insurance policies are more expensive and could be too much of a burden to pay the premium for that entire time.
What Is The Process of Getting Life Insurance With Diabetes?
As mentioned above, the process of getting life insurance could be a bit more involved. Insurers will ask for medical records and also may require a physical exam to assess how severe your situation really is.
The severity of your condition will affect the premium rates that you are offered, so it is important to be honest. Here are the things that companies will evaluate when considering you for life insurance:
- The Type Of Diabetes (Type 1 Or Type 2)
- Current Age and Date Of Diagnosis
- Doctor Records
- A1C Levels
- How Well Your Diabetes Is Controlled
- Your Medical History and Also Your Family Medical History
- Current Height and Weight
- Any Other Conditions Present
- Your Lifestyle Choice (Do You Smoke ETC)
Fortunately, many insurers are now offering good rates for people with diabetes. It’s important to shop around and weigh out all your options so you could get the very best rates for your situation.
When applying, it’s important to be as honest as you possibly can about your condition. Lying on an application will most likely result in your policy getting canceled, which would take away the coverage for your SBA loan.
What Happens If You Are Denied Life Insurance Because Of Your Diabetes?
If you’re denied for life insurance because of your diabetes you could do a couple things.
The first thing you could do is appeal the decision by submitting more information to the insurer, like doctor reports or recent blood tests.
You could also consider going to a broker who specializes in high-risk life insurance. Such brokers have access to companies that are not available to regular consumers, and they will be able to find a policy for you if you are having trouble getting one through traditional means.
Lastly, there are guaranteed issue policies or no exam-policies. But when it comes to an SBA loan, these options aren’t the best for these reasons:
- The amount of coverage isn’t too high, so if you have a high loan amount to pay off, it may not cover it all.
- Premiums will be much higher, so this could be an expensive option to take on.
- Beneficiaries may not get the full amount of the death benefit (especially in the event that you die shortly after starting the policy). This is often a problem when getting an SBA loan, as the full amount of the loan must be paid off.
If you feel as if you’re healthy enough to get a more traditional type of life insurance, go for it. It’s important that you don’t give up and keep going until you find the coverage that you need. More often than not, there is some company that will be willing to insure you and provide the coverage necessary for your SBA loan.
Consider These Options To Find The Right Life Insurance For Diabetics
If you’re looking for life insurance to cover your SBA loan, CFA Insurance is the way to go. They offer a convenient quote comparison system that allows you to compare top providers’ rates with just one click, and there’s no obligation to buy. You can potentially save 58% on your policy when you use their services.
Life Insurance For SBA Loan
LifeinsuranceforSBAloan.com offers a three-step process designed to make the experience as easy and stress-free as possible. With them, you can get approved for a policy within one day and have the recording process handled in just 5-7 business days. No matter which option you choose, you can rest assured that your SBA loan will be covered with the right life insurance policy.