We all want to protect our loved ones financially after our death. And, to do so, a life insurance plan is really important. A life insurance policy makes sure that our loved ones are financially secure if you, the insured, pass away. A life insurance plan comes with a plethora of benefits and great coverage. Many people use their insurance money to address and solve business, inheritance, and tax issues. In this write-up, we are going to discuss what premium finance life insurance is and how it can help you out with your financial troubles.
What is Premium Financing Life Insurance?
Premium financing is a typical financial service that uses borrowed money to pay for life insurance premiums. This is commonly done in conjunction with very large policies where the insured are eligible for very large death benefits. In this case, there is no need for the policy owner to tie up their own capital for paying the premiums. Instead of that, the capital is used as collateral for the loan.
So, it can be said that life insurance premium financing in Newark takes out a third-party loan to pay for a policy’s premiums without digging into the savings of the insured whereas in other cases, the lender charges interest, and the borrower or the insured repays the loan in regular installments until the insured passes away or the debt is returned. Premium financing life insurance plans are useful for high-net-worth individuals who don’t plan to liquidate assets to pay for life insurance premiums with their money. How do you qualify for premium financing?
Lenders involved in premium financing for a life insurance plan need to ensure that Some criteria are met before investing. Let’s check them out:
The insured is financially stable with high net worth but with limited liquid assets.
The insured is under age 70 and in good health.
A properly demonstrated insurable interest and financial need.
Existence of additional collateral being pledged besides the insurance contract alone.
Involvement by outside legal or financial counsel.
A properly demonstrated exit strategy besides death benefit payoff.
If you want to learn more about premium finance life insurance in Napa, contact a finance and insurance service provider and get their advice and assistance.
For more information visit: https://www.councilfinancial.com/.17.htm