Premium Financing is a strategy used by business owners and wealthy individuals to finance premiums for large life insurance policies. The strategy allows a high-net-worth individual to use an alternative method for paying the life insurance premiums rather than using their current cash flow or assets. Life insurance premiums can be financed between 75% to 90% by the bank or by a third party. Understanding the role of Premium Financing in life insurance is key to protecting more wealth for generations to come and by covering future estate taxes.
The wealthier a business owner or an individual is, the greater the need for life insurance.