What is premium Financing

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PostPosted: Fri Apr 17, 2009 11:32 am   Post subject: What is premium Financing  

How does it work, who can take this type of policy

If it is financed by a bank, the Interest on the loan can be more than the benefit receieved from the Policy proceeds

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PostPosted: Tue Apr 21, 2009 5:52 am   Post subject:   

Premium financing allows a senior to purchase high value death benefit policy, when a financing company would pay all the premiums on his behalf.



At the event of the death of the policy holder the financier would deduct the loan amount along with the interest accumulated on it from the death benefit when the beneficiary of the deceased would receive the remaining of the death value.


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PostPosted: Tue Apr 21, 2009 8:28 am   Post subject:   

Hi,



Quote:
Premium financing allows a senior to purchase high value death benefit policy, when a financing company would pay all the premiums on his behalf.




Actually, you'd need to make sure that your policy earns basis points ranging from 150-300 above the rate of interest of your loan. In order to ensure good returns you may consult with an attorney, a public accountant or a financial adviser.



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PostPosted: Tue Apr 21, 2009 9:05 am   Post subject:   

Premium means the actual amount paid over the securities or shares or face value of the nominal value. In the fund, it refers specifically to the sale of closed-end fund market, the fund unit price is higher than the value of net assets.

Premium financing is used for more than asset value (actual cash value of the assessment) to finance, and more money out of that part is generally considered intangible assets.

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PostPosted: Tue Apr 21, 2009 9:42 am   Post subject:   

Premium financing is typically used for large policies for someone who has a high net worth, but not great cash flow.



Sometimes, the person may just feel that that they have something better to do with their cash.



There are firms that specialize in this.

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PostPosted: Wed Apr 22, 2009 2:46 pm   Post subject:   

By "large policies" are you considering policies that serve a longer maturity term e.g. WL policies? Or is it regarding policies that offer you a larger sum-assured?

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PostPosted: Wed Apr 22, 2009 3:38 pm   Post subject:   

I'm talking policies with very high premiums. The typical policy that is premium financed has an annual premium of over $100,000. It will be some sort of permanent policy. This may be whole life or it may be universal life.

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PostPosted: Fri Apr 24, 2009 2:16 pm   Post subject:   

Expert,



Quote:
It will be some sort of permanent policy.


Do all WL policies fall in to this category?

Could it be a final expense policy as well?



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PostPosted: Fri Apr 24, 2009 7:41 pm   Post subject:   

A permanent policy is any policy that is designed to stay in force for as long as the insured is alive. All WL policies fit into this category.



A final expense policy would fit into that category.

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