Life Premium Financing Arrangements: The State and Federal Rules
April 15, 2020 by Scott Rose
Life insurance premium financing can help savvy investors leverage their portfolio for sizable returns. Some choose to finance in order to take advantage of higher-yielding investments. Others use that strategy to address a lack of cash flow or liquidity.
Navigating the rules and regulations that govern life insurance can be complex, even for the most adept advisors. This is particularly true when it comes to premium financing.
Think about federal regulation.
Premium financing is not subject to federal statutes or regulations any more than traditional financing may be. While certain federal laws will apply, such as anti-fraud provisions and truth-in-lending disclosure requirements — which detail payment rates and schedules, life insurance premium financing is largely governed on a state-by-state basis.
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