Premium Finance

Premium finance is a strategy used by typically wealthy individuals and business owners to finance premiums for large life insurance policies. The strategy allows a high net-worth individual who has a need for permanent life insurance to use an alternative method for paying the premiums.

Premium financing relies on internal policy funding to pay back the loan. This is not guaranteed and results may be more or less favorable than illustrated. The ability to internally fund a life insurance contract will be dependent upon the performance of the contract and is not guaranteed. If remaining policy values and scheduled premiums are insufficient, additional out-of-pocket payments may be needed to keep the policy in force or to repay the loan. Premium finance lenders are responsible for the premium financing arrangement. The life insurance companies with which we work are bound only by the terms of the life insurance policies that they issue.

Rather than using their current cash flow or assets to pay for those premiums, they may choose to finance them from a bank. Individuals who are well suited to the strategy understand both the power, and associated risks, of leverage.

Premium finance may be very attractive for healthy insureds between the age of 25 -55, but arrangements can be successfully designed for clients up to insurance age 70.

There are many options to consider when designing and implementing a financed life insurance policy, and we appreciate the opportunity to work with you and your clients to suggest policy designs that might be suitable for financed life insurance.