Premium finance.

Jun 4, 2019

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Have you ever sold a "bank loan policy" aka premium finance

  1. Yes

    5 vote(s)
    62.5%
  2. No

    2 vote(s)
    25.0%
  3. Is that a final expense policy?

    0 vote(s)
    0.0%
  4. What the hell is a bank loan policy?

    1 vote(s)
    12.5%
  1. magagent
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    magagent Guru

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    I"m betting that 90% of agents have no idea what a premium finance policy, less they have actually sold one.
    Have you ever sold a premium finance policy? If so, how long did the entire process take?
     
  2. Tahoe Ray
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    Tahoe Ray Guru

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    I've never sold one personally but have been the general agent for a few.

    A lot of it depends on the financing more than anything else. Is the insured securing his/her own financing or using a finance company (that eats 30% or so the total commission).

    Is the owner's balance sheet "close" to the carrier limits or does it well exceed their requirements?

    Does the client want to pay the interest each year or only the first few years and then when necessary?

    We did one earlier this year and it took almost 3 months (financing company, owner wants to pay very little but has resources to pay everything back out of pocket.)

    Not sure if that's what you're looking for. I've only been part of a handful of these.
     
  3. magagent
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    magagent Guru

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    That is exactly what I'm referring to, 90% of the ones I'm involved in a finance company is involved. All of mine involve a business owner instead of just a wealthy individual


    QUOTE="Tahoe Ray, post: 1300584, member: 36169"]I've never sold one personally but have been the general agent for a few.

    A lot of it depends on the financing more than anything else. Is the insured securing his/her own financing or using a finance company (that eats 30% or so the total commission).

    Is the owner's balance sheet "close" to the carrier limits or does it well exceed their requirements?

    Does the client want to pay the interest each year or only the first few years and then when necessary?

    We did one earlier this year and it took almost 3 months (financing company, owner wants to pay very little but has resources to pay everything back out of pocket.)

    Not sure if that's what you're looking for. I've only been part of a handful of these.[/QUOTE]
     
  4. Mike007
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    Mike007 Expert

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    I have heard of it because my business partner looked into it but we do not have the client base to sell a policy at the moment.
     
    Mike007, Jun 8, 2019
    #4
  5. Lloyds of Lubbock
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    Lloyds of Lubbock Super Genius

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    Premium financing is all we do in my office.
    It can take over a year.
    You need to get him underwritten...physically and financially.
    A lawyer need to draw up a trust.
    You need to find a lender
    You need a term sheet from the bank.
    Your client may need to provide assets to the bank.
    You need to design a policy.
    Is the client paying full interest, partial interest, fixed amount?
    You need an exit strategy....death is not an option.
    The bank needs to approve the policy you are selling.
    You better figure out how to service the policy before you sell it (Who monitors the interest payments)?
    My advice is for your client to buy a term policy which is convertible, this way you will not lose your offer.
    BTW along the way, his lawyer has a guy and his acct has a guy....you will have to deal with that also.
     
  6. magagent
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    magagent Guru

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    Great post!

     
    magagent, Jun 12, 2019
    #6
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