Benefits of Life Insurance Premium Financing
Benefits of Life Insurance Premium Financing Life insurance premium financing involves taking out a third-party loan to cover a policy's premiums. Much like other loans, the lender charges interest , and the borrower (the insured, in this case) repays the loan in regular installments before the debt is satisfied or the insured passes away, where case the total amount is usually paid down with insurance proceeds. This strategy might be useful to high net worth individuals (HNWIs) who don't desire to liquidate assets to cover costly life insurance premiums outright. But could be the practice too risky? KEY TAKEAWAYS The bigger the quantity of your life insurance policy , the more pricey the premiums on it. Three regions of risk for insurance premium financing are qualification risk, interest rate risk, and policy earnings risk. One concern could be that the money value of the policy might not increase as fast while the interest rate. Why Go For Insurance Premium Financing? Fi