Is Premium Finance a Good Fit for Your Insurance Clients?

premium-financeIf premium finance is something you’ve never considered in the past, now is the time – particularly if you can answer “yes” to any of the following questions:
  • Do you have clients who are business owners?
  • Are they between the ages of 40 and 65?
  • Do they have a net worth upwards of 1mm (preferably 5mm)?
  • Are your clients looking for tax deductions for the business?
Below are just a few of the reasons some of your clients could really benefit from a premium finance arrangement:
  • It eliminates the requirement for a large up-front payment to an insurance company.
  • Multiple insurance policies can be attached to a single premium finance contract, allowing for a single payment plan to cover all insurance coverage.
  • Premium financing is often transparent to the individual or company insured. Brokers transmit the completed premium finance agreement to the premium finance company, and the policyholder is billed as they would be for any other typical insurance policy.
  • It allows clients to obtain needed coverage without liquidating other assets.
  • The main benefit in premium financing is avoiding the opportunity cost in paying out of pocket (same as when discovering how to reduce costs using a consultant). By using other people’s money (leveraging a lender’s capital), clients can retain a significant amount of capital known as retained capital.
Who are “typical” premium finance clients? While premium finance could be advantageous for a wide range of client types, we often see it used by those in the medical, accounting, finance and legal fields, as well those in the farming and construction industries. It’s also a popular solution for professional athletes. Want to learn more? Contact the team at Brokers Central for details. You may also find the following handouts helpful: Exit Strategies with Leveraged Planning Solutions Know Your Leveraged Planning Prospect Split Dollar Financing Solutions As an Illustration & Research Specialist for Brokers Central, Nicole Anderson assists brokers with product illustrations, proposals, research and information to support sales. View Nicole’s BioEmail Nicole.