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If you own your own business, it represents many things to you. A successful business is your livelihood, your security, and your investment for the future. It is a valuable asset that you can safeguard in a number of ways.
You've worked hard to build your business, and you know how vital it is to protect your investment…and the people you care about.
That's why RBC Royal Bank Business Loan Insurance Plan makes such good sense.
There are many good reasons to borrow for your business. And, just as it's important to consider various loan plans available at Royal Bank of Canada, it's equally important to protect your investment with the Business Loan Insurance Plan.
Underwritten by Sun Life Assurance Company of Canada, the Business Loan Insurance Plan is designed to give financial security to you, your organization, partners, employees and family, by ensuring that your business loan is paid off in case of death.
Available through RBC Royal Bank for individuals aged 18 to 64 years, this valuable protection is competitively priced and offers up to $1,000,000 in life insurance coverage.
Why insure your business loan?
There are many good reasons.
Your business revenues may depend on the skills of one person or a number of key people. Their deaths could have a significant impact on your business earnings.
By helping to ensure that debts are settled, Business Loan Insurance makes it easier for your business to get through this difficult transition period.
There are many other good reasons to arrange Business Loan Insurance through RBC Royal Bank:
- For owner-operators, the Business Loan Insurance Plan helps pay off business debt, thereby preserving personal insurance to cover other needs such as income replacement, education funding, taxes and so forth.
- The death of an owner-operator can result in significant tax liabilities and a reduction in assets. The Business Loan Insurance Plan helps minimize potential cash flow problems by helping to pay off business debts.
- For family-owned businesses, Business Loan Insurance helps protect an important family asset.
- If you intend to leave your business to your children, Business Loan Insurance helps free them of the burden of debt if you die.
- When business debt is secured with personal assets, Business Loan Insurance Plan helps pay off this debt so personal assets stay intact.
Competitive premiums and a non-smoker's discount.
Business Loan Insurance Plan premiums are very competitive and lower than many individual life insurance plans. Moreover, they provide discounted rates for non-smokers.
Business Loan Insurance Plan provides excellent value and peace of mind to you, your family, your partners and your employees.
Pay only for as much insurance as you need.
Business Loan Insurance Plan automatically tracks your term loan or operating line, and bases your premiums on your average daily balance. As your outstanding balances decline, any available coverage is automatically used to insure other eligible loans of your Business. As a result, you pay only for as much or as little as you need. And, you pay nothing when the average outstanding balance of your operating line is zero.
Apply for additional coverage to ensure that your Business is protected as it grows.
You can now apply for coverage up to a maximum of $300,000, even if it exceeds your authorized credit amount. This feature allows you to plan for any future increases in credit, and ensures that you will have enough coverage on your new loan balances (up to a maximum of $300,000), without having to re-apply for additional coverage. While your coverage amount may exceed your authorized credit limit, you will only pay premiums based on the outstanding balance of your loan(s).
Accidental dismemberment benefit, at no additional cost.
A serious accident can affect the contribution a key person makes to your business. That's why we've included an accidental dismemberment benefit at no additional cost.
If the Insured Person suffers an accidental dismemberment, a benefit of up to $50,000 will be paid to reduce your loan.
What are the eligibility requirements?
What Businesses are eligible for insurance?
To qualify and remain eligible for coverage, the Business must:
- Be resident in Canada or the United States of America, and operate in Canada
- Be a sole proprietorship, partnership, corporation or other entity operating a business/farm that is indebted to RBC Royal Bank under a loan
What loans are eligible for Insurance?
The following loans of a Business are eligible for coverage:
- Operating loans
- Term loans
- Canada Small Business Financing Loan
- Royal Bricks & Mortar loans
- RoyFarm Mortgages
- Loans granted under the Farm Improvement and Marketing Co-Operative Loan Act
All loans must be denominated in Canadian dollars.
Eligible loans do not include: letters of credit, letters of guarantee, most commercial mortgages, VISA*, overdrafts, leases, bankers' acceptances or tender loans.
Who's eligible for insurance?
To qualify and remain eligible for coverage, the individual for whom insurance is requested (the Proposed Insured) must:
- On the date the insurance begins, be aged 18 to 64 years old (however, coverage can be continued until the last day of the month in which the Insured Person turns age 70), and
- Be responsible for repaying the Insured Loan, or
- Be responsible in whole or in part for the management of the Business, or
- Be a guarantor or endorser of the Insured Loan, and
- Be a resident of Canada or the United States of America
The Business may cover up to 25 Insured Persons on any Insured Loan.
Are there any health questions that must be answered?
For many Proposed Insureds, completing the Basic Insurability Question in the Application for Insurance is all that is required. However, a Health Questionnaire must be completed by the Proposed Insured and submitted to the Insurer if:
- The Total Insurance Amount exceeds $300,000, or
- The Proposed Insured answers "yes" to the Basic Insurability Question
Calculating life insurance premiums
The life insurance premium for the Insured Loans includes the life insurance benefit and the accidental dismemberment benefit and is due and payable with the scheduled loan interest payment. Premiums are based on the Insured Person's current age, sex, smoking status and the daily outstanding balance of all Insured Loans.
As your outstanding balances decline, any available coverage is automatically used to insure other eligible loans of your business. Once coverage is applied to these eligible loans, they become Insured Loans.
Monthly Premiums for each $1,000 of Insurance (plus any applicable provincial sales tax)
| |
Male |
Female |
| Age |
Smoker |
Non-smoker |
Smoker |
Non-smoker |
| 18 - 29 |
0.14 |
0.10 |
0.10 |
0.09 |
| 30- 32 |
0.15 |
0.11 |
0.12 |
0.10 |
| 33 - 35 |
0.17 |
0.12 |
0.13 |
0.11 |
| 36 - 38 |
0.20 |
0.14 |
0.16 |
0.12 |
| 39 - 40 |
0.25 |
0.16 |
0.19 |
0.13 |
| 41 - 42 |
0.29 |
0.19 |
0.22 |
0.15 |
| 43 - 44 |
0.34 |
0.22 |
0.25 |
0.17 |
| 45 - 46 |
0.39 |
0.27 |
0.28 |
0.20 |
| 47 - 48 |
0.45 |
0.32 |
0.32 |
0.23 |
| 49 - 50 |
0.56 |
0.37 |
0.36 |
0.27 |
| 51 - 52 |
0.66 |
0.42 |
0.42 |
0.31 |
| 53 - 54 |
0.76 |
0.48 |
0.48 |
0.35 |
| 55 |
0.85 |
0.52 |
0.54 |
0.38 |
| 56 |
0.93 |
0.57 |
0.61 |
0.41 |
| 57 |
1.00 |
0.62 |
0.66 |
0.45 |
| 58 |
1.07 |
0.68 |
0.72 |
0.49 |
| 59 |
1.14 |
0.75 |
0.78 |
0.53 |
| 60 |
1.22 |
0.83 |
0.84 |
0.58 |
| 61 |
1.34 |
0.93 |
0.90 |
0.62 |
| 62 |
1.48 |
1.03 |
0.96 |
0.67 |
| 63 |
1.63 |
1.13 |
1.02 |
0.74 |
| 64 |
1.81 |
1.24 |
1.08 |
0.82 |
| 65 |
2.00 |
1.34 |
1.14 |
0.91 |
| 66 |
2.19 |
1.47 |
1.20 |
1.01 |
| 67 |
2.38 |
1.62 |
1.30 |
1.10 |
| 68 |
2.60 |
1.78 |
1.44 |
1.18 |
| 69 |
2.84 |
1.94 |
1.60 |
1.28 |
Example: For an Insured Person who is a 35 year old female non-smoker, monthly premiums for an Insured Loan of $50,000 would be $5.50, plus tax if applicable ($50,000 / 1,000 x 0.11 = $5.50)
Some commonly asked questions
"Why should I insure my business loan?"
If your business revenues depend on the skills of one person or a number of key people, their deaths could have a significant impact on your business earnings. By helping to ensure that debts are settled Business Loan Insurance Plan makes it easier for your business to get through this difficult time.
"I have enough personal assets/equity in my home to cover the business debt. Why do I need Business Loan Insurance?"
Consider what would happen if your family had to liquidate all or part of your nest egg suddenly and in a down market. Business Loan Insurance Plan ensures the business debt is paid off so your personal/family assets can remain intact and your savings and home equity can be used for what you intended them for.
"I already have a lot of insurance, isn't that enough?"
What is most important to consider is…Can your family/partners continue to run the business and make ends meet, or will they be forced to sell the business? Will they be able to keep up monthly expenses on the home/business, if necessary? Business Loan Insurance Plan helps pay off business debt, thereby preserving personal insurance to cover other needs.
"It's too expensive - The additional expense isn't necessary."
What would happen to your business if you or a key person of your business were to die? Would your death or the death of a key person have a significant impact on your business earnings? Business Loan Insurance Plan premiums are very competitive and lower than many individual life insurance plans. It provides excellent value and piece of mind for your and your business.
How can I get more information?
For more information on the Business Loan Insurance Plan, contact a RBC Royal Bank Account Manager.
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