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PREMIUM FINANCING
"We make LIFE easy!"
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PREMIUM FINANCING IS INTENDED FOR INDIVIDUALS
WHO HAVE A NEED FOR LIFE INSURANCE BUT DO
NOT WANT TO USE OR LIQUIDATE EXISTING ASSETS
IN ORDER TO PAY THE PREMIUMS.
UNDER THIS TYPE OF ARRANGEMENT
THE INSURED
TAKES OUT A LOAN FROM A
THIRD PARTY LENDER
IN ORDER TO PAY THE REQUIRED
PREMIUMS
THE LIFE INSURANCE CARRIER
IS NOT PARTY TO
THE LOAN ARRANGEMENT. THE
LENDER SETS THE
INTEREST AND LOAN REPAYMENT
SCHEDULE. THE
LENDER WILL ALMOST ALWAYS
REQUIRE COLLATERAL
FOR THE LOAN, USUALLY THE
CASH VALUE, AND
SOMETIMES ADDITIONAL COLLATERAL
AS WELL.
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THE BEST PROSPECTS FOR PREMIUM FINANCING
ARE USUALLY OLDER INDIVIDUALS WHO HAVE A
NET WORTH OF AT LEAST $5,000,000. VERY OFTEN
THESE PROSPECTS ARE BUSINESS OWNERS OR INDIVIDUALS
WHO HAVE THEIR ASSETS TIED UP IN OTHER INVESTMENTS.
THE RATE OF RETURN ON THESE OTHER INVESTMENTS
IS USUALLY GREATER THAN THE INTEREST RATE
ON THE LOAN FOR THE LIFE INSURANCE POLICY.
THIS TYPE OF ARRANGEMENT
WORKS BEST IN A
LOW INTEREST RATE ENVIRONMENT. |
CONCEPTS INDEX |
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