Published on 7/20/2020
A business is not only mathematics related to profit and loss. There is so much more to running a business than maintaining numbers. Building prominence and reputation for yourself and your company is always a priority. Part of this will come from your internal working and strategizing.
The way you treat your employees as a businessperson shall speak a lot about you, your beliefs and values. You need to take care of the staff in your company the same way they take care of your company, and we all know paying a salary does not compensate for a person’s dedication to your company.
Hence, many companies give perks or benefits to their employees and make them feel appreciated. It includes bonuses, annual holidays, distinctive leaves and even insurance benefits, and if you ask us – life insurance is perhaps the best assistance you can give to your employees.
Most Americans rely on life insurance plans provided by their workplaces. It is a benefit which assures employees and their families about risk and harms that could come their way. Businesses as well have become more conscious about keeping their employees happy and content.
What do you do when all the funds in your company are in use to keep the company afloat? You still need funds to pay for insurance premiums for all your employees. It is here that life insurance premium financing comes in.
So, what exactly is life insurance premium financing?
The word ‘financing’ in itself implies the payment for an excellent/service by anyone other than you. So when you come to life insurance premium financing, the same concept applies.
A third party pays for all the insurance premiums instead of you. The loan taken by businesses to pay for the insurance premiums is paid back with some time.
Thus, you will not have to liquidate your assets to pay for paying the insurance premiums for your employees.
Financial services have termed life insurance premium financing as Leveraged Planning since the lending authority is leveraging the buyer’s assets.
Features of life insurance premium financing
- It is apt for individuals and businesses with high net worth and entrepreneurs.
- To be eligible for premium financing, companies should ideally have a net worth of at least $1 million. Additionally, the company needs to be running for five years.
- A score by Fair, Issac, Company (FICO) should be higher than 500 for businesses.
- An excellent strategy for entrepreneurs and emerging businesses.
- Financial lending services provide life insurance premium financing and do not require collateral or a guarantee.
- Minimum life insurance policy financed is for $100,000 for 5-7 years.
- Policies lesser than $100,000 do not attract lenders.
Always keep in mind, take care of your employees like family. Ultimately, your employees will work like they are a part of your family. Life insurance premium financing can help you do little things to make your employees happy. That is how you make a business successful, and that is how you build an empire. If you’re convinced and would love to know more – don’t hesitate, get in touch with us at firstname.lastname@example.org!