Is Premium Insurance Financing For You?
By Buff on Jan 27, 2009 in Finance
Premium finance life insurance is not for everyone. With what the majority of are earning, we can afford to pay our life insurance premiums out of pocket, because they are not astronomical. But if you are one of the fortunate people who are very, very well off, then odds are you are not only insuring your life, but also all of your assets and acquisitions. This can be very costly and even some people who are worth a mint don’t have a lot of cash flow.
This is where life insurance financing comes in. I honestly had a hard time understanding what it was at first, but thanks to some research I needed to do for a work project I feel I have a somewhat solid grasp on it. Once you get past all the terminology and confusing terms, it’s really quite simple to understand.
If you have a net worth of a few million dollars and earn at least $200,000, then you can qualify to get a loan to pay your insurance. Premium financing for life insurance is great if you qualify, because your monthly insurance premiums (which can be quite high) don’t come out of your pocket. Rather, the loan pays the monthly cost. And you don’t have to pay off the loan until you have passed away and some of your insured life insurance money goes towards paying the loan off.
