Today, those who need to purchase a large amount of life insurance—whether to protect their loved ones or for business planning purposes—sometimes prefer not to disrupt their current cash flow in order to pay their premiums.
For these clients, premium financing can be a smart solution. Using this funding technique, the money to pay life insurance premiums can be borrowed at current interest rate. Your client can use the life insurance policy’s cash value as collateral, and repay the loan later, when there is more cash on hand. It can be a valuable alternative for those individuals and business owners who don’t want to tap into their existing funds or liquidate high-yielding assets to pay their premiums.