Premium finance works well once the rate of interest on the loan is a smaller amount than the insured may create on the resources he would have sell to pay the premium, or once the policy’s expected come back is larger than the rate of interest on the loan. Someone might want to enter into a premium finance agreement to a mass a lesser price for a policy, to cut back tax issues, and to preserve income or liquidating assets to pay insurance premiums.
The recipient should be a bankrupt-remote individual (i.e., creditors can’t get at the assets for bankruptcy), sort of a LLC or associate degree sealed insurance trust. the aim of a premium finance program is to pay as very little as potential for the contract versus the chance that the loan’s rate of interest are going to be quite the advantages of the policy.
