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March 20, 2014 at 02:29 PM
Times are changing in the premium financing industry. Over the past several years, aggressive agents have placed their clients in failing non-recourse transactions, making for substantial chargebacks and a clouded industry. Productive carriers are now changing their approach to regulating these transactions by breathing fresh air into a fee-only approach to premium finance. But before looking forward, we must look back to a psychology fueled by greed, one that cast a shadow of uncertainty on the industry.
This greed became prevalent. So much so, many sought to remove it by looking towards high cash value and levelized commission; this resulted in an insurance chassis that minimized outside collateral risk but provided a reduction in long-term potential accumulation. Careless advisors controlled by greed overlooked the risk of dramatic reduction in policy surrender value, if the market underperformed in early policy years as the rider expired. This translated to unexpected collateral risk. Levelized commissions, high chargeback periods, reduction of long-term growth and uncertainty in performance of the insurance chassis leaves you with too many unknowns in the premium finance structure.
We’ve discovered an approach that fills in those unknowns by empowering you.
