Premium Funding vs Premium Finance (OPUS Company)

[paulallred]

Hello everyone, so today I was emailed a vague yet interesting video today about Premium Funding, not Premium Financing.
Simply put, this company who I can't seem to find, via internet search, claims they fund the whole life insurance premium, so that the client doesn't come out of pocket with any money.

Any help on information about this company or others that offer this typ of financing would be helpful, thank you!

Paul

 

[Lloyds of Lubbock]

So tey are underwriting the first years premium.
The client does not cover shortfall or pay interest?
How much of a relationship does the client need with the bank?

 

[DHK]

Sounds like rebating.

 

[paulallred]

Most likely they bank financing the premium recovers their principal from a future policy loan.
Still looking for information about this OPUS company...

 

[paulallred]

Sorry recovers their principal and interest from a future loan against the life policy.

 

[Lloyds of Lubbock]

It is not rebating.
It is a bad strategy.
You are accruing interest and hoping to get a good return to pay it at a later date.
I am sure they are also illustrating a variable loan to pay back the bank.
They are creating an arbitrage in the policy that may not exist in real life.
You are also leaving out a lot.
I am assuming this is done with an IUL.
Even if surrender charges are waived, in the early years of the policy it is in shortfall.
I cannot imagine a bank being in a position of not being 100% collateralized.
If the market has a bad year and the expenses are greater than the minimum return, there would be a margin call.
You should take their marketing material and run it by the advanced planning of one of your preferred carriers.

 

[briannosch]

The main idea of premium funding is the following: Premium Funding is a way to avoid paying your insurance premiums in a lump sum. When done through a broker, you can fund multiple policies together so that all of the insurance premiums are paid in one monthly installment. It is mostly used by businesses as it frees up cash flow that would have otherwise been used paying insurance and safe and secure funding with no impact on existing banking or credit arrangements. I was advised about it by my Debt Management Education tutor.

 

[Life Hawk]

Sounds like rebating.

Thinking the same.