Premium Financing Thoughts

[jarmour]

The brokerage I work for conducts wet transactions so feel free to message me with any questions/concerns. Thanks.

 

[jarmour]

this capital 10 program is highly fraudulent

 

[Mr. Bill]

Well, I think we got a bit sidetracked, and rather than start anew, might I ask:

What should my expectations be:

I have a prospective client for a premium financing case (no Life Settlement expected - client will hold the policy). Does this go through a "normal, everyday" FMO/IMO, or does it have to go to some specialist firm?

Is the financing arrangement something the FMO/IMO should have access to, or do I need to look to another party?

What kind of things should I be looking for (or wary of) in the financing arrangement?

Any other help will, well, HELP!!!

 

[arnguy]

What's a yalls? I am a damn Yankee!

 

[lifesettlementadvisor]

Well, I think we got a bit sidetracked, and rather than start anew, might I ask:

What should my expectations be:

I have a prospective client for a premium financing case (no Life Settlement expected - client will hold the policy). Does this go through a "normal, everyday" FMO/IMO, or does it have to go to some specialist firm?

Is the financing arrangement something the FMO/IMO should have access to, or do I need to look to another party?

What kind of things should I be looking for (or wary of) in the financing arrangement?

Any other help will, well, HELP!!!

Some IMOs have the relationship and know how to handle a PF case. A lot don't like to mess with them because they do not want to pay for the LE reports. It might be easier to go through a third party. If you are going to do a finance for life program, the lender should only take about 20% of your commission.

If you want, I can take a look at your case and give you some more specifics. You can reach me at [email protected]

 

[insureagent]

my understanding here is that these policies are being bundled much like subprime mtgs were here of late and sold as CDO's to investors seeking a higher yield. My questions comes in when seeking to settle the cash after the 2 yr window, I notice that most applications for a settlement request a health history, and IF then an offer is made... i suspect that they dont buy every policy. So if a 70 yr old is healthy enough to qualify for a policy at issue, who's to guess his health has turned by 72 enough to get a settleemnt offer. And if he doesnt then he is still on the hook for the premiums. Financing or not, all of the financing agreements I ve seen so far requred the insured to plege collateral, which cant just be the life policy.

 

[theinuranceguy]

my understanding here is that these policies are being bundled much like subprime mtgs were here of late and sold as CDO's to investors seeking a higher yield. My questions comes in when seeking to settle the cash after the 2 yr window, I notice that most applications for a settlement request a health history, and IF then an offer is made... i suspect that they dont buy every policy. So if a 70 yr old is healthy enough to qualify for a policy at issue, who's to guess his health has turned by 72 enough to get a settleemnt offer. And if he doesnt then he is still on the hook for the premiums. Financing or not, all of the financing agreements I ve seen so far requred the insured to plege collateral, which cant just be the life policy.

SO after two years the investors can opt to not purchase the policy? and the Insured is on the hook for the past premium? which could be thousands upon thousands of dollars?

Did i get that right?

 

[lifesettlementadvisor]

The insured is not on the hook for the policy if they cannot sell it. With most premium financing companies, after the term loan, you can refi the policy year after year. When the senior initially finances the policy, there is no investor. Most agents start the bidding process 18 months into the policy.

 

[fjman]

Personally, I think PF offers some really good options in the right market. Generally though, PF companies are looking to finance policies with $100K+ premiums. Usually, the insured should be someone that could technically afford the premiums but perhaps lacks liquidity or expects a greater return elsewhere.

Transamerica is very involved with PF structured policies. ROP UL seems to be a popular solution and/or the enhanced cash value rider to cover collatteral requirements. A life settlement is definately a common exit strategy. Just good to know these are not only available as short term solutions.

Structured correctly, the insured could use the cashvalue to pay back the loan and still poccess the paid up policy.

Who wouldn't like to write a $100K+ policy!