What is financed insurance?
Life insurance is financed with special measures taken for the payment of premiums. Instead of paying the insured party the premium itself, it concludes an agreement with a third -party creditor or an insurance company to pay for its name. The insured party ends with the advantage of coverage without having to pay the premium immediately. This arrangement is structured under the Life Insurance Contract, which determines the deadline for the loan and the interest rate.
Life insurance can be an investment vehicle and an integral part of the transfer plan for individuals with a high value. Unlike many average people who buy only so much life insurance to protect their families, rich individuals can use trustworthy and transfer companies to hold life insurance in their own life. They usually do not need life insurance returns as the average person usually does. Can buy policy as an investmentE Gamble, which pays a considerable amount if it dies unexpectedly, but still retains cash if it eventually holds policy to maturity.
Some individuals have most of their assets tied in investments that cannot be easily disposed of without losing money. In other scenarios, the money is invested in investing in high return, which would make no sense to leave. No matter when it is time to remove the insurance policy of your life, the individual decides to borrow money instead of using his own. It concludes an agreement with a third -party creditor or an insurance company that offers an insurance policy to exceed the money to pay the premium. The resulting arrangement is financed by insurance.
all financed insurance uses the money value of the policy as a safety. If the insured party dies without repaying the money lent to pay the premium, the loan will be paid from benefitdeadly. The creditor may also exclude this policy. The exclusion will take over the policy from the insured and transfer it to the creditor. The creditor can then sell policy on the secondary insurance market or hold it until maturity, although the insured life is still a debtor.
Many funded insurance arrangements require different types of use. The debtor is often obliged to establish other assets to secure the loan; This is not usually a problem for the individual's type that enters this type of transaction. He usually has enough assets to secure a loan, but does not want to dispose of them.
The second version of the financial insurance is a variety without recursing. In this case, the creditor expands the loan without requireing further safety. If the insured party is the default, the creditor will only advance against this policy. This type of insurance is no longer popular with creditors.