In a nutshell, premium financing is the lending of funds to a person (or company) to cover the cost of a life insurance premium. These premium finance loans are provided by a third-party entity, often known as a premium financing company.
Life insurance agents and financial advisors love this market, because these cases are typically much larger than traditional life insurance cases. Larger face amounts and larger premiums naturally means more compensation to the writing agents!
A main benefit is leverage (using other people’s money) for those that qualify! These financing programs are not for people that can’t afford the insurance, but rather for higher net worth individuals or families that would prefer to reap all the benefits and obtain the coverage without having to liquidate any of their assets.
Premium Financing essentially eliminates the requirement for the full payment to an insurance company funded 100% “out-of-pocket” from the buyer. Instead, the proposed insured retains more of their own capital, pays a portion of the premium and a lender loans a large portion of the premium (which eventually gets paid back to the lender).
With premium financing, business owners, entrepreneurs, professionals and higher net worth individuals (or companies) can retain more of their own capital up-front, while maximizing wealth transfer dollars and building large cash values (and tax-free or untaxed income) for supplementing their own retirement or leaving a larger legacy!
It can be very time consuming to research and find the right premium financing company and lenders. Another major goal is getting the proposed insured(s) approved with favorable terms for all parties without too much hassle.
Life Professionals is thrilled to inform you that we have partnered with one of the nation’s premier Premium Financing Companies in the industry! If you want to pursue this market and if you are working with us, then you can have direct access to everything you’ll need to find real success in this exciting market!
Contact us if you have any questions about Premium Finance or if you’re ready to get started!
For more details and a list of participating carriers, please contact Life Professionals and we’ll be happy to assist you! IUL is our preferred product of choice for Premium Financing.