Premium Financing for Worst Case Scenarios

During the last day of the IPVE symposium, the participating epidemiologists were discussing worst-case scenarios in the topic entitled "Insuring Families Against Epidemic Losses".

The spotlight was on how families could cope in cases where the father or breadwinner catches on a plant virus epidemic and dies. The participating epidemiologists agreed that while death is inevitable, the families do not have to suffer poverty. During the discussion, the participants came in contact with representatives from the premium financing industry, who were all happy to spread the word on premium finance.

It was clear that premium financing has so far only been popular in the United States. Majority of the epidemiologists from Asia and Africa have never heard of it, while others thought the subject was vaguely familiar. Those from the United States were aware of it, although some of them volunteered to say that it is free life insurance.

In actuality, however, premium financing is a loan that a person negotiates if he wants to take out an insurance policy but can't afford it. What happens is that a premium financing company pays for the premiums of a life insurance policy. The insured individual then repays the loan in two ways: either he repays the loan in monthly installments, or the loan amount plus interest is deducted from death benefit, with the whole of the rest of the amount turned over to the beneficiaries. The terms of payment depended on the company offering the premium financing loan.

In the United States where it first became popular, senior citizens usually take out premium financing loans with high net worth assets. They usually do it because they want to bequeath millions to their loved ones without ever having to sell their assets just to pay for the premiums on a life insurance policy. Some of the more altruistic aged millionaires do it because they want to donate millions to charity without impacting their liquidity.

During the symposium, the participating epidemiologists agreed that other countries could benefit from premium financing just in cases of epidemic breakouts. Multiple deaths can greatly impact the future of those who are left behind. But of course, nobody ever wants to go hungry in the present, when everybody in the family is still living and breathing, just so the breadwinner could be insured for a huge amount of money.

The epidemiologist glowed at the prospect of premium financing being introduced in their own countries, which was promised by the representatives of the US-based premium finance companies who were present in the symposium.