15. Dezember 2020
Some high-end financing programs will be sold assuming that the policy will have a significant market value at the end of the period. The client can then terminate the financing agreement and make an investment profit. The secondary market for life insurance is very volatile. Billing offers vary depending on the interest rate environment and the degree to which capital „expects“ a return. Any premium program or broker that encourages you to enter into a premium financing transaction for the sole purpose of selling the policy after the policy is no longer subject to recourse from the airline issuing it (usually two years) may be illegal and violate the state`s „insurable interest rate rules.“ Since interest on premium money is linked to an index, usually to the London Interbank Offered Rate (LIBOR) or Prime, when interest rates rise, total interest charges will also increase. If the policyholder cannot afford to pay interest, they lose their insurance and have significant debts if the value of the policy rebate is less than the balance owed. If this were the case, the client would not have been able to pay the premiums of an unfunded policy, as with everything else, make sure you could pay the policy. Responsible lenders take this risk into account when taking charge of the financial. Typical borrowing rates are coupled with 1 year LIBOR with a competitive spread of 180 bits/s. Most borrowing rates are expected to be 2.5% to 6%; 1-year LIBOR fluctuation – the fixed spread. The lender may have the right to call the loan at the end of the period. Almost all premium financing loans are less than the duration of the policy. No insurance broker may be compensated, other than commissions, which are deductible from premiums for insurance policies or contracts, potential policyholders for or as a result of the negotiation or purchase or other services related to an insurance contract established in that state or any other insurance contract under such insurance policies or contracts, including the correction of the rights resulting from it, unless that compensation is based on a written memorandum signed by the party to be collected and determined in the amount or extent of that benefit.
(A) in an agreement or other transaction in which a party, the „insurer,“ is required to give financial value to another party, the insured or the „beneficiary,“ depending on an accidental event in which the insured or beneficiary has or has a material interest affected by the occurrence of that event. No person, with the exception of a bank, savings bank or state savings bank or a combination of savings or loan funds, a licensed insurer or a lender licensed under Section 9 of this chapter, may operate the activities of a premium financial agency without a licence obtained by the Superintendent, as stipulated in this section.