Are you looking for a way to finance your insurance policy but not sure which way to go? With all the confusing insurance lingo, we’re here to help you sift through the jargon and make an informed decision. Let’s begin with the basics.
What is insurance premium financing?
Simply put, this is a loan deliberated to facilitate financing of monthly insurance premiums. Often provided by a third party, it is an agreement between the client, the insurance company and the bank. It is a contract or a promissory note and as with any other loan, the lender will charge interest. Insurance premium financing is recommended and useful for high net worth individuals.
What do you need?
With an easy application process, individuals and businesses can apply for financing. These are the general requirements:
Proof of age. You must be a Kenyan who is over 18 years but not older than 75 years. Your ID is sufficient.
Proof of monthly income. Your pay slips of three to six consecutive months for employed individuals is needed.
For business owners and corporations, proof of registration of business, copy of company PIN and copy of Memorandum and Articles of Association is required.
An invoice or quotation from your insurance agent.
A completed and signed application form which must include the premium financing agreement.
Benefits of premium financing
The tedious burden of paying a lump sum is relieved by the bank. The bank ensures the insurance payment is made monthly on your behalf. You can then put your focus on growing your business.
The payment options are flexible and versatile. There’s an open door for negotiating the terms of the loan. Adjustments may be made to suit individual needs.
Some banks can finance upto 100% of the insurance premium. Installments should be paid in equal amounts monthly.
Unlike other loans, collateral is not required. Proof of income or business is enough to secure funding.
Takes 24 hours for loan approval. As long as all required documentation is presented, there are usually little to no delays to kick off the financing process.
Competitive interest rates. Due diligence on the part of the client is vital here.
Premium financing is a short term loan. In less than a year it should have been completely paid off. You don’t have to worry about servicing a loan for years.
No commitment fee is required. This therefore guarantees a seamless process from application all the way to approval.
The client is cushioned. The insurance company isn’t informed if client installments are late. But only if the client defaults and the policy has to be cancelled.
Maybe you’re worrying about having to liquidate assets or you’re attempting to work out a way to update the present terms of your insurance. Whatever the case, subscribing to insurance financing premium solutions will take a load off your plate. The choices are endless.