Premium Finance Life Insurance policies are not for everyone.
Not only is there quite a list of applicant requirements, but there will be some people looking to get premium finance policies for a variety of different reasons.
While some people are simply looking for a way to add security to their estate and to provide for their families in case of an untimely death, other people are looking to make a buck and see premium financing as a wise investment opportunity.
It is usually those looking to sell their life insurance policies after the two year elimination period that will have concerns over whether or not their policy can be sold at the conclusion of those two years.
There are a variety of reasons why a premium finance policy could not or would not be sold in two years.
First there is the factor of changing interest rates.
One of the main reasons for getting a premium finance policy in the first place is to benefit from the usually lower interest rates that a financial institution can provide versus the higher interest rates that the insurance company offers.
By paying lower rates on such a substantial loan you can save a great deal of money even over the short period of two years.
If the market changes to the point that the interest rates that you are paying for your loan become more than had you not borrowed the money in the first place, you will be hard pressed to find an investor who will be willing to give you more for your policy than what you have already invested through the re-payment of the loan.
Lack of interest in death bonds or longer than ideal projected life expectancy are also reasons for why the investment market could make your otherwise appealing life insurance policy not worth the investment.
Investors want to be able to have their money be returned not only at a higher rate, but also as quickly as possible.
These investors will see a premium finance policy of an individual with a long life ahead of him as more of a liability than an asset.
Some people will have policies that are simply not worth the risk to investors of years of investment in high premium payments, which is why the industry standard begins at age 69.
Secondly, a premium finance life insurance policy would most likely not be sold at the conclusion of the two year elimination period if the policy holder decided that it would be in their best interest to hold on to the policy.
One of the most common reasons for deciding to keep rather than to sell a policy is that during the course of the two years the policy holder may have had some heath problems that caused them to think seriously about whether or not it would be wise to sell a policy for less than what could be paid out in the event that the policy holder should die sooner than was anticipated..
It is not uncommon for these older individuals to have not only more health problems but unexpected health problems.
Although you must have a clean bill of health to be approved for financing in a premium finance policy, who is to say that during the two years that you first have the policy nothing could happen?.
Sometimes the unexpected will be cause enough to not have your policy sold at the end of two years.
Even if your premium policy cannot be sold at the end of two years it is not all bad news.
Yes, if you want to keep the policy in force, you will need to continue payingpremiums that can be very high and may cause some financial strain.
But remember that just like any life insurance policy, a premium finance policy will guarantee a payout to your beneficiaries at the time of your death that will be directly correlated with those high premium payments that you made.
If you can find a way to pay the premiums, your loved ones should be left with more than enough to be taken care of and your estate should remain with those who you trust with its care.
Not only is there quite a list of applicant requirements, but there will be some people looking to get premium finance policies for a variety of different reasons.
While some people are simply looking for a way to add security to their estate and to provide for their families in case of an untimely death, other people are looking to make a buck and see premium financing as a wise investment opportunity.
It is usually those looking to sell their life insurance policies after the two year elimination period that will have concerns over whether or not their policy can be sold at the conclusion of those two years.
There are a variety of reasons why a premium finance policy could not or would not be sold in two years.
First there is the factor of changing interest rates.
One of the main reasons for getting a premium finance policy in the first place is to benefit from the usually lower interest rates that a financial institution can provide versus the higher interest rates that the insurance company offers.
By paying lower rates on such a substantial loan you can save a great deal of money even over the short period of two years.
If the market changes to the point that the interest rates that you are paying for your loan become more than had you not borrowed the money in the first place, you will be hard pressed to find an investor who will be willing to give you more for your policy than what you have already invested through the re-payment of the loan.
Lack of interest in death bonds or longer than ideal projected life expectancy are also reasons for why the investment market could make your otherwise appealing life insurance policy not worth the investment.
Investors want to be able to have their money be returned not only at a higher rate, but also as quickly as possible.
These investors will see a premium finance policy of an individual with a long life ahead of him as more of a liability than an asset.
Some people will have policies that are simply not worth the risk to investors of years of investment in high premium payments, which is why the industry standard begins at age 69.
Secondly, a premium finance life insurance policy would most likely not be sold at the conclusion of the two year elimination period if the policy holder decided that it would be in their best interest to hold on to the policy.
One of the most common reasons for deciding to keep rather than to sell a policy is that during the course of the two years the policy holder may have had some heath problems that caused them to think seriously about whether or not it would be wise to sell a policy for less than what could be paid out in the event that the policy holder should die sooner than was anticipated..
It is not uncommon for these older individuals to have not only more health problems but unexpected health problems.
Although you must have a clean bill of health to be approved for financing in a premium finance policy, who is to say that during the two years that you first have the policy nothing could happen?.
Sometimes the unexpected will be cause enough to not have your policy sold at the end of two years.
Even if your premium policy cannot be sold at the end of two years it is not all bad news.
Yes, if you want to keep the policy in force, you will need to continue payingpremiums that can be very high and may cause some financial strain.
But remember that just like any life insurance policy, a premium finance policy will guarantee a payout to your beneficiaries at the time of your death that will be directly correlated with those high premium payments that you made.
If you can find a way to pay the premiums, your loved ones should be left with more than enough to be taken care of and your estate should remain with those who you trust with its care.
