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Understanding the Premium Financing Process, Part Two

On each policy anniversary, the lender calculates how much collateral is needed to back the premium financing loan.

You make interst payments to the lender.

The cash value of the policy is pledged as collateral to the lender.

Additional assets are assigned to fill in the gaps in the collateral.

The lender makes payments to the life insurance company. Premiums and interest credits help build cash values.

At Your Death: The death nenefit is used to repay the lender if the loan has not been repaid during your lifetime. The remaining death benefit is passed to your heirs.