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Premium financing'' involves the lending of funds to a person or company to cover the cost of an insurance premium. Premium finance loans are often provided by third party finance entity known as a premium financing company; however insurance companies and brokerages occasionally provide premium financing services through premium finance platforms. Premium financing is mainly devoted to financing life insurance which differs from property and casualty insurance. To finance a premium, the individual or company requesting insurance must sign a premium finance agreement with the premium finance company. The loan arrangement may last from one year to the life of the policy. The premium finance company then pays the insurance premium and bills the individual or company, usually in monthly installments, for the cost of the loan. Typically, clients that engage in this transaction are age 29 to 75; with net worth of $5MM or greater. Younger clients benefit in the current environment due to the advent of premium financed indexed universal life policies. ==Types of Life Insurance Premium Financing== *"Traditional" Recourse Premium Finance - The client enters a fully collateralized loan arrangement with the intention of holding the life insurance policy to maturity. Traditional financing arrangements are generally purchased for estate liquidity needs and offer the most advantageous loan rates, fees, and spreads. The client may have an exit strategy using other assets in the estate. Traditional finance is particularly effective for clients who have a large but illiquid net worth. *Non-Recourse Premium Finance & Hybrid Premium Finance are now available. Additionally the collateralized investments may be held by the insured's investment team as long as the collateral money is pledged annually with third party verification of the funds. This is not suitable for the client that has primarily illiquid funds such as real estate. Cash investments are the accepted collateral. *It is important to have an attorney or premium finance platform, familiar with premium finance transactions, review any and all documentation surrounding a premium finance transaction. Currently, specialty premium finance platforms exist to establish consistency and reliability in premium finance transactions. Be sure to notice that any upfront inducements offered to an insured to enter into a premium finance transaction should be viewed as illegal and individual insurance laws should be carefully reviewed (although many states allow insurance agents to rebate a portion of their commission as long as they rebate the same percentage of their commission to all of their clients). *In addition, be aware of programs that require non recourse or are advertising "free insurance". These programs are likely not carrier endorsed or can include substantial hidden upfront fees. *Additionally, most advisers are utilizing premium finance platforms to aid in the case design, maintenance (annual servicing) of life insurance premium finance cases, thereby mitigating any inherent risk. 抄文引用元・出典: フリー百科事典『 ウィキペディア（Wikipedia）』 ■ウィキペディアで「Premium Financing」の詳細全文を読む スポンサード リンク
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