Premium Financing is a popular strategy for buying life insurance used by high net worth individuals, business owners and entrepreneurs. By financing the majority of the upfront cost of the life insurance policy, high net worth individuals don’t have to cash in, or sell assets to pay the whole cost of life insurance up front.
Therefore insuring the lives of key people is one way to protect the business.
Instead of paying the full cost of insuring several key people, a business can use finance to pay for the majority of the cost of insuring the lives of their key people.
Premium financing a policy gives a business the protection it needs while providing the company with a cash flow efficient way to fund the life policies of critical people.