What is premium financing insurance?
Premium financing insurance is a strategy used to purchase permanent life insurance by leveraging assets to pay premiums. It is a high-risk strategy that should be entered into cautiously and slowly. At Blue Herring, we don’t recommend financing premiums for insurance. If you don’t have the money to pay for insurance, don’t borrow money to do it.
What are the risks of premium financing life insurance?
While these strategies are commonly used by traditional brokers, we believe most consumers should get a second and third opinion before entering into these contracts.
- Today’s low interest rates are likely to increase over the course of your loan, leading to rising costs.
- Traditional brokers are extremely well compensated for selling these policies, leading to conflict of interests.
- Premium financing policies are built on unrealistic performance.
- Premium financing insurance is a long-term commitment.
- If your situation changes, you may become unable to meet your commitments.
- Premium financing insurance requires additional collateral
- Traditional insurance brokers push these strategies even if they aren’t right for you.
Potential benefits of premium financing
Possible Asset Liquidity
Instead of paying the premiums, you pay interest on the loan used to pay those premiums.
You Get Insurance Now
Rather than waiting to purchase insurance at a later age (thus increasing the cost), you can get it now.
Potentially Higher Return
Since you keep most of your cash in your pocket, you may be able to grow that asset at a higher rate than your loan interest rate.
Why Blue Herring?
We expect more from the life and disability insurance industry. So should you. Our fiduciary- and attorney-preferred independent underwriting model gives businesses the transparency and leverage they need to get the right policies for their key person insurance plans, at significantly lower prices.
- We comparison-shop real prices for your company’s key person insurance policies — not quotes based on incomplete information.
- We tell you everything you need to make the best decision, and we’ll share industry secrets you should know before you buy.
- We operate as a team with companies looking for the best key person insurance policies at the best price.
Meet your match.
Our extensive network of small, large, mutual, and public carriers positions us to find the best policy at the best price.
How to get started
Blue Herring is revolutionizing insurance sales with an unbiased, independent underwriting model that saves your company money.
Don’t take our word for it
Hear from the clients who’ve experienced the Blue Herring difference.