|
April 27, 2007
Guardian Enhances DI Coverage of Business Obligations Via Innovative Offering
| For media inquiries, contact:
|
Wendy Webster Coakley
Berkshire Life
Tel: 413.395.4467
Fax: 413.395.5986
wendy_coakley@berkshire.com
|
| Anayo Afolabi
The Guardian Life Insurance Company of America
Tel: 212.598.8329
Fax: 212.919.2790
anayo_afolabi@glic.com
|
New York,N.Y., April 27, 2007 — Business or professional practice owners who have borrowed money in order to establish or expand their firms or practices will benefit from a decision by The Guardian Life Insurance Company of America (Guardian) to customize the amount of business loan obligations covered in the event of a disability.
Guardian's Business Reducing Term (BRT) policy is a product that has been specifically designed to fund financial obligations that require periodic payments expiring at a given time. It insures up to 100% of monthly loan payments—principal and interest, provided the obligation rests with a single principal—should a business owner become totally disabled.
Now, in order to make BRT even more attractive to small business owners and the lending institutions that serve them, Berkshire Life Insurance Company of America (Berkshire)—the Guardian wholly owned stock subsidiary that administers its Individual Disability Income product—has changed the offering's issue limit from a flat $10,000 maximum monthly benefit to one based on the term and amount of a loan.
As a result, a borrower with a five-year loan can now apply for a BRT policy benefit of up to $22,500 per month. A 10-year obligation can be protected with as much as $12,900 per month.
"Since BRT addresses a critical gap in the contingency plans of many business owners, we feel this sliding-scale approach to issue limits will greatly enhance the product's appeal," said Matthew Gottfried, ASA, Berkshire's Director of Individual Disability Income.
Why is BRT Important for Businesses and their Lenders?
"As long as they can still run their businesses, owners can repay any loan that they take out from the earnings of the business," Gottfried pointed out. "If they die, life insurance can pay. But if they become totally disabled due to sickness or injury and can't work—a more likely scenario than dying prematurely—their business assets could be lost due to loan forfeiture."
Through BRT coverage, business owners can insure against a disability preventing them from meeting such fixed payment obligations as:
 | The funding of medium-term loans dependent upon the business talents of a key individual for their repayment; |
 |
| Purchase agreements; |
|
| Salary contract guarantees; and |
|
| Contract performance guarantees. |
|
How Does It Work?
Just as life insurance protects against the hazard of death, business reducing term disability insurance protects against the hazard of total disability. It is similar to decreasing term life insurance in that the total coverage reduces over time.
However, while the face amount of a decreasing term life policy diminishes, the BRT monthly benefit will always be the same. Only the number of months payable will be reduced.
For example, if a business owner becomes disabled, his or her BRT policy for a $1,000 monthly benefit will pay $1,000 a month until the term ends (or until the business owner recovers). The policy term can be anywhere from five years to 30 years.
"Insurance professionals are in a unique position to offer their business-owner clients a product with which no other company can compete," Gottfried said. "By significantly enhancing our business obligation coverage levels, we are signaling Guardian's long-term commitment to a key sector of the U.S. economy."
For information about the new BRT issue limits, producers should contact the nearest Guardian agency via www.GuardianLife.com/service_center/find_a_local_office.html. Each agency is staffed with at least one Disability Income Specialist, who provides local sales consultative support and service for disability income insurance cases.
About Guardian
Founded in 1860, The Guardian Life Insurance Company of America, New York, NY (Guardian) is one of the largest mutual life insurance companies in the United States. As of December 31, 2006, Guardian and its subsidiaries had $39.5 billion in assets (on a consolidated statutory basis). With more than 5,000 employees and 3,000 financial representatives, as well as more than 80 agencies nationwide, Guardian and its subsidiaries protect individuals, businesses, and their employees with life, disability, health, long-term care, and dental insurance products, and offer 401(k), annuities and other financial products and trust services. More information about Guardian can be obtained at: www.guardianlife.com.
About Berkshire
Berkshire Life Insurance Company of America, Pittsfield, Mass. (Berkshire), is a wholly owned stock subsidiary of The Guardian Life Insurance Company of America, New York, N.Y. Its key missions are to grow Guardian's disability income and long-term care lines of business and to research and develop new insurance products. More information about Berkshire can be obtained at : www.BerkshireLife.com.
| 
