Americo Financial Life And Annuity Insurance Company Inc
Life Insurance Premium financing is the safer way to purchase life insurance, especially for individuals with a high net worth. This enables a company to borrow the cost of life insurance premiums. This usually occurs when the business has a very high premium, which makes it necessary to borrow the amount in part or in part to prevent the company’s liquidity from diminishing.
Traditional financiers do not regularly offer premium financing, and business owners need to look at specific financing providers to obtain the loan.
Benefits of Premium Finance
When a company pays a large amount, the owner must first consider whether the funds are needed for the day – to – day running of the business or for the expansion of the business. And to prevent some of the company’s assets from being liquidated or to use key funds, financing is needed.
Often, businesses depend on one type of loan to be sustainable. Premium financing is often part of the debt cycle for a business with high life insurance costs.
A business owner can finance multiple policies through a single agreement that enables the owner to pay a single premium payment per month. In most cases, insurance companies accept premium financing and accept their payment directly from the financing provider. If this is the case, the premium financing company will bill the business owner instead of the insurer.
Premium financing of unqualified executive bonus plans
Premium financing can be used on non-qualified executive bonus plans, which are available to vital employees of any type of business. The employer has the discretion to cover the workers they want and the amount of the bonus. The business owner pays for the premiums on the policy, and the employee has to pay tax equal to the premium amount.
Financing of 770 accounts
A 770 account is a permanent life insurance policy structured to maximize its cash value. By maximizing the total death benefit and cash value, you can maximize the cash value of the life insurance policy. The cash value is more regular than not tax free and can be obtained at any time.
770 accounts have a very competitive rate of return and can be used as security. But the premiums can be high. High net worth individuals or business owners can use financing to keep up with premium payments without flowing assets.
As you can see, financing life insurance premiums can help individuals and companies who have to pay large premiums. This allows them to stay liquid while providing insurance coverage to yourself or to employees. It is ideal for business life insurance programs as well as private life insurance policies.