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Premium Financing

Written by True Tamplin, BSc, CEPF®

Reviewed by subject matter experts.

Updated on September 04, 2023

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Table of contents, what is premium financing.

Premium financing is a specialized lending option that provides individuals and businesses with the funds needed to cover the cost of insurance premiums.

By using this strategy, policyholders can avoid large upfront payments, manage cash flow more effectively, and potentially access tax benefits and asset protection strategies .

The primary purpose of premium financing is to help policyholders manage their cash flow by spreading out the cost of insurance premiums over a longer period.

This can be particularly beneficial for individuals and businesses with high-value insurance policies, such as life insurance or commercial insurance, where premiums can be expensive.

The key participants in premium financing include the policyholder, the insurance company, and the premium finance company.

The policyholder is the individual or business who requires insurance coverage, the insurance company provides the policy, and the premium finance company lends the funds needed to pay the premiums.

Types of Premium Financing

There are several types of premium financing available, depending on the specific needs of the policyholder. These include life insurance premium financing, property and casualty insurance premium financing, and commercial premium financing.

Life Insurance Premium Financing

Life insurance premium financing involves borrowing funds to pay for the premiums on a life insurance policy .

This strategy can be particularly beneficial for high-net-worth individuals who want to maintain their current lifestyle and assets while providing financial security for their beneficiaries .

Life insurance premium financing can also help policyholders minimize the impact of estate taxes , as the policy proceeds can be structured to cover these costs.

However, it is important to be aware of the risks associated with this strategy, such as potential loan default or the reduction of policy benefits due to unpaid interest .

Property and Casualty Insurance Premium Financing

Property and casualty insurance premium financing enables policyholders to spread the cost of their property and casualty insurance premiums over time. This can help individuals and businesses manage their cash flow more effectively and avoid large upfront payments.

Property and casualty insurance premium financing can also provide additional financial flexibility for policyholders, as the funds that would have been used to pay the premiums can be invested or used for other purposes.

However, there are risks associated with this strategy, such as the potential for loan default or increased costs due to interest and fees.

Commercial Premium Financing

Commercial premium financing is used by businesses to finance the premiums for their commercial insurance policies, such as general liability, property, or workers' compensation insurance.

This can help businesses manage their cash flow more effectively and avoid large upfront payments.

Commercial premium financing can also provide businesses with additional financial flexibility, as the funds that would have been used to pay the premiums can be invested or used for other purposes.

However, as with other types of premium financing, there are risks associated with this strategy, such as the potential for loan default or increased costs due to interest and fees.

Premium Financing Process

The premium financing process typically involves four main steps: application and underwriting, loan origination and agreement, collateral and security, and loan repayment and termination.

Application and Underwriting

The application and underwriting process for premium financing involves the policyholder submitting an application to the premium finance company, providing information about their financial situation, the insurance policy they wish to finance, and any collateral they may be offering.

The premium finance company then evaluates the risk associated with lending to the policyholder and determines whether to approve the loan.

Loan Origination and Agreement

In the loan origination and agreement phase, the premium finance company and the policyholder finalize the terms of the loan, including the interest rate , repayment schedule, and any fees associated with the financing.

The policyholder and the premium finance company sign a loan agreement, which outlines the terms and conditions of the financing arrangement.

Once the loan agreement is signed, the premium finance company pays the insurance premiums on behalf of the policyholder directly to the insurance company.

The policyholder is then responsible for making periodic payments to the premium finance company, which typically include both principal and interest.

Collateral and Security

In most premium financing arrangements, the policyholder is required to provide collateral or security to the premium finance company in order to secure the loan. This is typically done using the insurance policy itself, which serves as collateral for the loan .

In the event of a loan default or failure to make timely payments, the premium finance company may have the right to take possession of the policy and its associated benefits, such as cash value or death benefits.

This helps protect the premium finance company against the risk of loss in the event that the policyholder is unable to repay the loan.

Loan Repayment and Termination

Throughout the term of the premium financing arrangement, the policyholder makes regular payments to the premium finance company, which typically include both principal and interest.

The loan is considered fully repaid once the policyholder has paid off the principal balance, plus any accrued interest and fees.

Upon full repayment of the loan, the premium financing arrangement is terminated, and the policyholder retains full ownership and control of their insurance policy.

In some cases, the policyholder may choose to refinance the loan or enter into a new premium financing arrangement if they still require financial assistance to pay their insurance premiums.

Advantages and Disadvantages of Premium Financing

There are several advantages and disadvantages associated with premium financing that policyholders should consider before entering into a financing arrangement.

One of the main advantages of premium financing is cash flow management. By spreading out the cost of insurance premiums over time, policyholders can avoid large upfront payments and manage their cash flow more effectively.

Premium financing can also provide tax benefits, as the interest paid on the loan may be tax-deductible in some cases.

Additionally, premium financing can offer asset protection strategies, as policyholders can use the financing to help protect their assets from creditors or legal claims.

Disadvantages

Despite its advantages, premium financing also comes with some disadvantages. One such disadvantage is the increased cost of insurance, as the interest and fees associated with the loan can add to the overall cost of the policy.

Another potential disadvantage is the risk of loan default, which could result in the loss of the insurance policy and its associated benefits.

Lastly, premium financing can also lead to a potential reduction in policy benefits if the policyholder is unable to keep up with the interest payments, which could affect the overall value of the policy.

Regulatory and Legal Considerations of Premium Financing

There are several regulatory and legal considerations that policyholders should be aware of when considering premium financing.

State Regulations and Licensing

Premium financing is regulated at the state level, with each state having its own specific laws and regulations governing the practice.

In many states, premium finance companies are required to obtain a license and adhere to specific guidelines, such as maximum interest rates and disclosure requirements.

Policyholders should familiarize themselves with the regulations in their state before entering into a premium financing arrangement.

Disclosure Requirements

In many states, premium finance companies are required to provide clear and accurate disclosures to policyholders regarding the terms and conditions of the financing arrangement.

This typically includes information about the interest rate, fees, repayment schedule, and any potential risks associated with the financing.

Policyholders should carefully review these disclosures before signing a loan agreement to ensure that they understand the full terms and conditions of the financing arrangement.

Legal Considerations and Best Practices

Policyholders should also be aware of the legal considerations and best practices associated with premium financing.

This includes working with a reputable premium finance company that is licensed in their state and has a strong track record of success.

It also involves carefully reviewing the loan agreement and seeking legal advice if necessary to ensure that the terms of the agreement are fair and reasonable.

Finally, policyholders should be aware of the potential risks associated with premium financing and take steps to mitigate those risks.

This includes maintaining adequate collateral and ensuring that loan payments are made on time to avoid the risk of loan default.

The premium financing industry is expected to continue to grow and evolve in the coming years, with several trends shaping the future of the industry.

The premium financing market is expected to continue to grow and expand, driven by increasing demand for insurance coverage and the growing popularity of premium financing as a cash flow management strategy.

This is likely to lead to greater competition among premium finance companies and more flexible financing options for policyholders.

Despite the growth and expansion of the premium financing industry, there are also several challenges and opportunities that policyholders and premium finance companies will need to navigate in the coming years.

These include changing regulations, increasing competition, and evolving customer needs and preferences. Premium financing can be a useful strategy for individuals and businesses looking to manage their cash flow and access the benefits of insurance coverage.

However, it is important for policyholders to carefully consider the risks and benefits of premium financing before entering into a financing arrangement, and to work with a reputable premium finance company that can provide the guidance and support needed to make informed decisions.

Premium Financing FAQs

What is premium financing.

Premium financing is a loan arrangement used to finance insurance premiums, typically for high-value insurance policies.

Who can benefit from premium financing?

Premium financing is typically used by individuals or businesses that need to pay high insurance premiums upfront but want to spread the payments over time.

What types of insurance policies can be financed using premium financing?

Premium financing can be used for a wide range of insurance policies, including life insurance, property and casualty insurance, and professional liability insurance.

How does premium financing work?

Premium financing involves taking out a loan to pay the insurance premiums upfront. The borrower then repays the loan over time, typically with interest.

What are the pros and cons of premium financing?

Pros of premium financing include improved cash flow, access to higher coverage limits, and potential tax benefits. Cons include interest charges and the risk of defaulting on the loan.

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide , a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University , where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon , Nasdaq and Forbes .

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What Is the Assignment of Insurance Benefits?

An assignment of insurance benefits shares the ownership interest of an insurance policy with another party.

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More Articles

•   1. What Is a Life Insurance Assignment?
•   2. Absolute Assignment of Life Insurance Policies
•   3. What Is the Collateral Assignment of a Life Insurance Policy?

Assigning insurance benefits is a legal procedure that gives another party permission to receive payments or benefits directly from your insurance company rather than you receiving the benefits yourself. Depending on the arrangement, you may be able to terminate the assignment at will, or be required to keep the arrangement in place until you meet certain conditions.

Health Insurance

When you require medical care, it's important to have health insurance in place to protect your financial well-being. If your health care provider does not have a direct contract with your insurance company, it may require you to fill out an assignment of benefits form allowing it to bill the insurance company directly for your medical treatments. You remain responsible for any deductibles and co-pays, however, and are ultimately responsible for any medical bills.

Income Loan

Whole life insurance policies with accumulating cash values can act as supplementary retirement income planning investments. When you wish to access the cash value in your policy, you can assign your policy to a bank in exchange for a loan. Typically the bank lends you up to a specified percentage of the policy's cash value, and it becomes the primary beneficiary of the death benefit up to and including the outstanding balance of the loan at your death. The advantage of such an arrangement is that the bank loan is not treated as taxable income, unlike a policy withdrawal, and you repay the bank loan with the tax-free death benefit.

Collateral Loan

If you are self-employed and wish to secure a loan for your business, you may be required by your lenders to purchase life insurance as an additional guarantee. Once the insurance is purchased you complete a assignment of benefits, sharing ownership control with the bank. You must pay the insurance premiums and cannot make any decisions affecting the policy without the written consent of the lender. If and when you pay off your business loan, the assignment is terminated and you regain full control of the policy.

Charitable Contribution

Life insurance can be purchased as a means to finance a charitable gift at death. There are several ways to set this up, one of which involves assigning the benefits to the charity immediately after purchase. The assignment is typically irrevocable, as this requires the charity's consent to make any changes to the policy. The advantage of such an assignment is that your premiums are tax-deductible as a charitable contribution. Upon your death, the charity receives the death benefit directly, without the money passing through your estate.

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Philippe Lanctot started writing for business trade publications in 1990. He has contributed copy for the "Canadian Insurance Journal" and has been the co-author of text for life insurance company marketing guides. He holds a Bachelor of Science in mathematics from the University of Montreal with a minor in English.

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What Is an Insurance Premium?

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If you have an insurance policy, you might wonder how companies calculate your insurance premiums. You pay insurance premiums for policies that cover your health—and your car, home, life, and other valuables. The amount that you pay is based on your age, the type of coverage that you want, the amount of coverage that you need, your personal information, your ZIP code, and other factors.

Key Takeaways

• An insurance premium is the amount of money that you pay for an insurance policy.
• You pay insurance premiums for policies that cover your health, car, home, life, and others.
• Insurance premiums vary depending on your age, the type of coverage, the amount of coverage, your insurance history, and other factors.
• Premiums can increase each time you renew an insurance policy.

When you have an insurance policy, the company charges you money in exchange for that coverage. That cost is known as the insurance premium. Depending on the health insurance policy , you might pay the premium each month or on a semiannual basis. In some cases, you might be required to pay the full amount up front, before coverage starts.

Most insurance companies offer a variety of ways to pay your bill, including online options, automatic payments, credit and debit cards, checks, money orders, cashier’s checks, and bank drafts . You may qualify for a discount if you sign up for paperless billing options or if you pay the full amount all at once instead of making minimum payments.

There’s no set cost for insurance premiums. You could have the same car as your neighbor and pay more (or less) for insurance—even with the exact same coverage. It pays to shop around and compare prices and policies. There are insurers who offer a cash flow payment plan where your annual premium is broken into smaller payment units.

You’ll pay more for broader coverage. For example, a health insurance policy with a $1,000 deductible will be pricier than one with a $5,000 deductible. Similarly, a car insurance policy with a $0 deductible will be more expensive than a policy with a $500 one, all other factors being the same.

Still, that doesn’t mean you should automatically go for the cheapest policy just to save money. It’s essential that you consider your situation—and the likelihood that you’ll need to use that policy—when choosing the plan that will work best for you.

Insurance companies consider several factors when calculating an individual's insurance premiums. Group insurance providers will also look at these factors when they calculate the premium for a group .

Investopedia / Ellen Lindner

• Your age : Insurance companies look at your age because that can predict the likelihood that you’ll need to use the insurance. With health insurance, younger people are less likely to need medical care, so their premiums are generally cheaper. Premiums increase as people age and have a higher chance of needing more medical services . And teenage drivers are still working on building experience, so their auto insurance is more expensive. Likewise, older drivers—who tend to have slower reflexes—will also pay more.
• The type of coverage : In general, you have several options when you buy an insurance policy. The more comprehensive the coverage that you get, the more expensive it will be. For example, if you have an auto insurance policy that covers liability only, it will be cheaper than if you have a plan with collision, comprehensive, liability, medical payments, and uninsured/underinsured motorist coverage.
• The amount of coverage : The less coverage, the cheaper the premiums—no matter what you’re insuring. For example, if you buy health insurance, you’ll pay lower premiums for the same type of coverage if you have a higher deductible and a higher out-of-pocket maximum. Similarly, it will cost more to insure a $400,000 home than a $200,000 home.
• Personal information : Depending on the type of insurance for which you’re shopping, the insurance company may take a close look at things like your claims history, driving record, credit history , gender, marital status, lifestyle, family medical history , health, smoking status, hobbies, job, and where you live.
• Actuarial tables : Most insurance companies employ actuaries —business professionals who assess the risk of financial loss, using mathematics and statistics to predict the likelihood of an insurance claim, based on much of the aforementioned criteria. They typically produce something called an actuarial table that is provided to an insurance company’s underwriting department, which uses the input to set policy premiums.

The percentage of car insurance companies that consider credit ratings when calculating insurance premiums.

Insurance companies are all about risk assessment. The higher the risk, the higher the premiums. Still, there are ways to lower your premiums.

One way is to bundle your insurance . For example, if you have your auto, home, and life insurance policies with one company, then you’ll probably qualify for a discount.

Of course, you can save money if you reduce your coverage (e.g., increase your deductible). However, that’s not always a good choice. Consider your situation and the likelihood that you’ll use the policy before making any decisions.

There are other ways to save on your premiums, but they take more of a commitment. For instance, most states charge smokers up to 50% more than nonsmokers for health insurance policies. As an example, if you’re a smoker paying $600 a month for health insurance, you might be able to reduce your premium to, say, $400 if you quit smoking.

Another example: You may qualify for lower auto insurance rates if you improve your credit score . That’s because people with lower credit scores are, statistically speaking, more likely to file a claim.

How Much Are Insurance Premiums?

Insurance premiums vary based on the coverage and the person taking out the policy. Many variables factor into the amount that you’ll pay , but the main considerations are the level of coverage that you’ll receive and personal information such as age and personal information. For car insurance, that could mean age and driving record. For health insurance, it could be based on personal habits such as smoking or on preexisting conditions.

Does a Higher Insurance Premium Mean Better Insurance?

Not necessarily. Because so many variables go into determining your premium, your premium may be higher than someone else’s for the exact same coverage. Typically, you’ll pay a higher premium for more extensive coverage, such as a lower deductible, or for more added services, such as roadside assistance or rental car coverage.

How Can I Lower My Insurance Premiums?

The most foolproof way to lower your premiums is by choosing a lower level of coverage. If you like the coverage that you have, consider bundling—combining several different types of insurance—to qualify for multi-policy discounts. For health insurance, some companies offer incentives to build healthy habits, such as getting a yearly health assessment or trying to quit smoking. Some car insurance companies will also lower your premiums based on a good driving record or credit score.

Several metrics factor into the price of an insurance premium, including age, state and county of residence, and amount of coverage. You cannot change your age, obviously, but you can take advantage of incentives to lower the cost by, for example, quitting smoking or improving your credit score. Whether or not you bundle your insurance, change a health habit, or improve financial picture, it always pays to shop around. That way, you can find the best insurance policy at a price that you can afford. 

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What is an insurance premium?

Factors influencing premium rates, types of insurance premiums, how to manage your insurance premiums, the impact of policy changes on premiums.

• Frequently asked questions

What are Insurance Premiums?

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• An insurance premium is a regular payment made to an insurance company to keep a policy active.
• Premiums are required for all insurance types, including health , disability, auto, travel, homeowners, and life .
• Premium costs vary based on insurance type, but they're generally tied to the risk you pose to your insurer.

In order to keep your car, home, apartment, or health insurance, you need to pay a premium. While some factors that determine your premiums are within your control, including the number of claims you file, many factors — like your age and location — aren't. During the underwriting process, the insurance company will evaluate your current risk and set a premium amount. The policy will then be activated upon your first payment.

An insurance premium is a monthly or annual payment to an insurance company that keeps your policy active. Health insurance, life insurance , auto insurance, disability insurance, homeowners insurance, and renters insurance all require the policyholder to pay a premium to continue receiving coverage.

Unless you're buying term life insurance , which locks in a monthly rate for the full policy term, your premium amount usually isn't set in stone. Most policies last for six months or a year, at which point the insurance company will reevaluate your risk and may change your rate. 

Several factors influence insurance premiums including location, age and health, coverages, lifestyle choices, and more.  

Geographic location 

The cost of living in your area impacts how much your insurer has to pay if you need to file a claim. For example, healthcare may be more expensive in states like New York or California and your premiums will likely mirror those elevated costs. 

Additionally, living in a high-risk area influences your insurance rates. For example, policyholders who live in areas with high rates of natural disasters or crimes typically tend to see increased auto and homeowners insurance rates. 

Age and health status

Age and health status play a role in your insurance bill, namely your health and life premium. Fortunately, health insurers can't deny coverage or increase premiums based on a pre-existing condition. However, health premiums often increase with age. On the flip side, life insurers can refuse coverage or significantly raise premiums based on age or health status. 

Type and coverage amount 

The more comprehensive your insurance policy, the higher your premiums will be. Increasing your coverage limit, opting for comprehensive over basic coverage, and upgrading your policy with endorsements all contribute to higher premiums.

Lifestyle choices 

Engaging in risky behaviors and activities increases the likelihood of filing a claim. So, insurers will raise premiums for those with high-risk profiles to offset the financial liability. These "risky" behaviors vary based on insurance type. For instance, lifestyle choices like smoking or participating in extreme sports aren't used to evaluate your auto insurance premium but may be used for your health or life insurance premium. 

It's a good idea to buy multiple types of insurance to protect the different areas of your life. The types of insurance policy premiums include car, life, health, homeowners, renters, and disability insurance. 

Car insurance premiums

Car insurance premiums are incredibly variable. In addition to being determined by your age, driving history, and location, your premium can go up or down if you're involved in any car accidents or are cited for any traffic violations, like speeding, according to insurance-comparison site Policygenius.

A typical car insurance policy period lasts either six months or a year. The premium amount listed on your agreement with the insurer may reflect the total for the coverage period, even though you'll be making monthly payments. When the policy period is up, the insurer will reevaluate your driving record and other factors and may set a new premium.

Life insurance premiums

As previously mentioned, term life insurance premiums are locked in when the policy is signed. How much you pay is based on how much coverage you want, the type of policy you get, and how much risk you pose. Your risk is mostly determined by age, weight, nicotine use, driving history, health history, and your job. Your current health is evaluated during the medical exam, which will typically require blood and urine tests.

The average person can expect to pay $300 a year for life insurance, according to Policygenius, but it really depends on your situation.

Health insurance premiums

When it comes to health insurance, your monthly premium isn't the only payment you have to make for health coverage. In fact, usually the lower your premium, the more you'll have to pay out-of-pocket for doctor's visits, prescriptions, and other medical costs. Health insurance policies are renewed on an annual basis, so your premium can change from year to year.

Homeowners insurance premiums

Premiums for homeowners insurance are fairly straightforward, although they're often determined by several factors outside of the homeowner's control. According to Policygenius, an insurer will consider your home's location, size, age, and build. Houses in wildfire, tornado, or hurricane-prone areas almost always have higher insurance premiums. 

Another factor that goes into homeowners insurance premiums is your insurance score, which you do have some control over. The insurance score represents how likely you are to file a claim based on your credit score , claims history, and whether your home is outfitted with safety precautions like fire alarms, security systems, or weather protections, explains Policygenius.

Renters insurance premiums

Renters insurance is by and large the most affordable type of insurance. Your premium is based on your coverage amount; your deductible, or what you are willing to pay out-of-pocket before insurance kicks in; your credit score; your location; and the value of the stuff you want to protect.

Most people pay between $15 and $20 a month for coverage amounts into the six figures, according to Policygenius.

Disability insurance premiums

Disability insurance is income protection to cover the chance you'll experience a disability that keeps you from working longer than 90 days, according to Policygenius. The premium for long-term disability insurance can be anywhere from 1% to 3% of your salary, starting around $25 a month and topping out around $500 a month. Age, location, occupation, coverage amount, benefit period, waiting period, and health all contribute to the premium.

Although purchasing multiple insurance policies keeps you adequately protected, high insurance costs are often a pain point for shoppers. Fortunately, the following strategies can make saving on insurance costs a walk in the park. 

Shopping for competitive rates

Shopping for insurance by comparing insurance rates helps you find the best rates on the coverages you need. To do so, gather quotes from multiple providers, ensuring similar levels of coverage across each quote. 

Increasing deductibles 

A deductible is the amount you must pay before an insurer covers your claim or service. Generally, increasing your deductibles leads to lower premiums. However, if you need to file a claim, your out-of-pocket cost will be higher. So, before choosing a high deductible, ensure you can afford it. 

Qualifying for discounts

Insurance companies provide insurance premium discounts to reduce your cost. Most companies advertise discounts on their website, but it wouldn't hurt to call and ask. 

Some popular discounts include the:

• Multi-policy discount: Save money on your policy by buying two or more insurance products from the same company.
• Loyalty discount: Lower your premiums by staying with your carrier for a certain amount of time.
• Affiliation discount: Receive a discount for being a member of affiliated organizations (Professional associations, alumni associations, employers, etc.).

Policy modifications and life changes can cause your premiums to increase or decrease. Being aware of how those altercations affect your premium will help you stay on top of the cost of insurance.

How policy adjustments and premium changes work

Insurance premiums typically stay the same throughout your policy term. However, it could change immediately if you add endorsements, increase your limits, raise your deductibles, etc.

Premiums can also fluctuate due to changes in your risk profile, like your age or claims history. These changes are normally applied in the next policy period. One caveat: a change in location can alter your premiums on the spot.

Reviewing and updating your coverage

Reviewing your insurance policies prevents overinsurance (causing you to overpay) and underinsurance in one or more areas. Work with an insurance broker to evaluate your individual needs and balance your insurance portfolio. Also, depending on the insurance type, it's a good idea to shop every year to find a better price on your insurance.

Insurance premiums frequently asked questions

Depending on your policy terms and preferences, you'll pay your insurance premiums monthly, quarterly, semi-annually, or annually, 

Yes, premiums increase or decrease based on factors such as age, lifestyle changes, policy adjustments, and claims history.

Lower your premium by shopping around for better rates, increasing your deductibles, maintaining a good credit score, and taking advantage of available discounts.

Premiums vary because providers weigh risk factors differently. Other elements that affect insurance rates include coverage options, discounts, and the company's overall cost structure.

Yes, state and federal regulations oversee insurance rates to ensure transparency and fairness. Keep in mind that rates still vary significantly between providers.

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• Main content

Premium Financing

For insurance agents.

The Insurance Industry's Leading Premium Financing and Payments Solution

With more than 45 years in insurance premium financing, IPFS provides insurance agents a level of customer service that is legendary. IPFS is a privately held company with localized offices across the U.S., Canada, and Puerto Rico. We are not owned by a bank or other entity, which enables us to offer the most efficient, customized, digital-first services in the premium financing business.

As a family-owned business and strategic premium financing partner, IPFS offers One Platform of solutions to help agencies better serve their customers. We provide native and custom integrations for existing agency management platforms, and many other features designed to help both insurance agencies and general agents grow their businesses. Our wholly owned subsidiary and payment facilitation company, AndDone, LLC, offers customers multiple, secure and efficient payment collection options, creating a one-stop source for all things financing and payments. 

Our size, market presence, experience, and independence provides financial strength and flexibility to handle all of your accounts, ranging from large, complex relationships to smaller, more routine engagements. In 2022, we financed more than 700,000 loans across North America, totaling more than $13 billion in premiums in the U.S. alone.

Technology Solutions

IPFS is the industry leader in providing easy-to-use technology to assist agents with day-to-day business. With services including credit card and ACH down payment options, our aim is to help you save time. Additionally, our enhanced eForms delivery option allows agents to streamline their insurance agency operations and reduce waste.

• IPFS Connect and a mobile optimized website that allows customers to access their account and make payments anywhere
• Text alerts
• Credit card and ACH down payment
• Agent and insured web portal
• Agency dashboard on ipfs.com provides insight into insured activity

Integrations

IPFS system integrations are tools that enhance agency management systems. With our custom solutions we have seen dramatic improvements in efficiency and profitability with our partner agents. Depending on which agency management system is in place, we will recommend integration solutions that improve quoting, processing, and reporting.

• IPFS QuoteLink ®   - Pre-built integrations with agency management systems such as Prevail and Applied
• IPFS CustomLink ®   - Third-party integrations with submission tool for agencies that prefer not using eSign
• IPFS DataLink ®   - Data reporting technology
• IPFS eCommLink ™   - Integrates using IPFS CustomLink with additional payment processing for the life of the account

Benefits of Premium Financing

While technology and custom integrations are a crucial piece of our service offerings, how does partnering with IPFS affect my bottom dollar? Here are just a few ways premium financing with IPFS benefits you:

• Premium financing services provide a competitive service offering for insurance agencies
• Custom integrations save time, energy, and labor costs
• Our team of professional IPFS Associates are nationwide across the U.S. and Puerto Rico
• Premium finance allows unique opportunities when business owners might not otherwise be able to afford the appropriate level of insurance

Continuing Education

IPFS has created the industry’s top premium finance continuing education program. We offer multiple classes designed to appeal to your employees with different skill sets and credit requirements.

Arranging a class is easy. We teach at the location of your choice, and we file all required state forms, free of charge. Our certified instructors are experienced in the field, and are located throughout the United States and Puerto Rico. Many of our attendees have expressed that the class is one of the best they’ve taken. We provide four courses: Premium Finance Options, Premium Finance Express, Avoiding E&O Loss and the Fundamentals of Ethics.

Course offerings vary by state. Contact your Sales Executive for availability, course credit information, and additional details. 

Purchase Plans

Are you interested in starting a premium finance company? For many years, IPFS has helped premium finance companies grow by purchasing their premium finance company’s receivables.

With IPFS as your strategic vendor, your premium finance company will have increased access to funds and services without tying up credit lines. This program allows you to customize your own market rates and streamline operations by reducing the administrative work associated with billing and collections. Your agency-owned premium finance company can produce profit without the need of additional people or resources.

Working with IPFS provides multiple benefits including:

• Additional income
• IPFS assumes the risk
• Eliminate expenses as IPFS assumes all billing and collecting responsibilities after purchase
• Additional services for your Customers, while IPFS provides free access to our online quoting system and credit analysis

Our experienced team can guide you through the process of starting your own premium finance company in your state. Or, if you’ve already started a company, talk with us about enhanced services IPFS can provide.

*Please note that not every program listed above is available in every state. A program’s availability in a particular state, among other considerations, is determined on the applicable law of such state.

Learn How IPFS Benefits Insureds

Benefits for Business Owners

Financing your commercial insurance premiums gives you the flexibility to use your working capital more effectively. Freeing up capital can allow you to focus on product development, hiring new employees, marketing and other investments to grow your business.

Benefits for Insurance Companies

The insurance industry is digitally enhancing its purchase and service model to elevate the  customer experience  for insureds. This is where IPFSDirect ®  steps in. IPFSDirect is a business unit established under IPFS Corporation who works exclusively with insurance companies providing payment and collection services.

What Is An Insurance Premium?

Updated: Aug 2, 2021, 6:00am

Paying your insurance premium allows you to maintain your coverage.

While the cost you pay for some types of insurance can fluctuate every year, do you know how insurance companies calculate premiums? Here’s some insight into how insurance premiums work and the factors that influence your cost.

What Is an Insurance Premium?

An insurance premium is a sum you pay periodically to keep your insurance policy active and in force. Depending on your insurer and the type of policy you have, you can make payments monthly, quarterly, semiannually or annually. In many cases, you may qualify for a lower rate if you pay your premium in one lump sum annually.

If you forget to make a premium payment, there’s usually a grace period. But after that an insurance company can cancel your policy—even if the missed payment was an honest mistake.

Factors That Impact Insurance Premiums

Several factors influence how much you pay in premiums. While some factors are policy specific, others are based on you—the policyholder—or the characteristics of the assets you’re insuring.

Here are a some common pricing factors for homeowners and car insurance :

• Coverage limits
• Deductible amount
• Past claims

Auto Insurance Premium Pricing

Factors that influence your auto insurance premium include:

Age. Drivers under age 25 generally pay among the highest rates, even with a good driving record. Rates start to drop after age 25.

Driving history. Traffic violations and accidents will often cause rates to increase at renewal time.

Type of car. Your vehicle choice will impact rates because insurers will look at claims made by owners of the same model. Also, your vehicle’s value affects the cost of collision and comprehensive insurance . These coverage types pay for repairs—or the value of a vehicle that’s been totaled—due to accidents, theft, fire, collisions with animals and other problems.

Miles you put on your car. Having lower mileage every year can put you in a lower rate category.

ZIP code. Where you park your car and where you live impacts how much you pay for insurance. For example, if you live in an area prone to theft and vandalism and leave your car on the street, you’ll probably have to pay more for coverage than someone who lives in a low-crime city and parks their car in the garage.

Credit. Depending on where you live, insurers may look at your credit-based insurance score and charge more if you have a poor score.

Past claims. Drivers who cause accidents or make claims will likely see rates rise at renewal time, because they are now seen as riskier customers. Not all accidents make rates go up .

Home Insurance Premium Pricing

Factors that influence a homeowners insurance premium include:

Age and condition of the home. Older, vintage homes may cost more to insure since they may require costly materials to rebuild them back to its original condition.

ZIP code. Some states and cities are simply more vulnerable to frequent and/or expensive claims, which affects the rates for everyone in the area.

The cost to rebuild a home. Your dwelling coverage is based on the cost to rebuild the house in the event of a big disaster, like a large fire or tornado. The building materials and additional features of a home can increase the coverage price. For example, a home with a tile roof may cost more to rebuild than an asphalt roof.

Additional risks. Pools, trampolines and even dogs can increase your insurance cost.

Valuables. While a home insurance policy includes coverage of the contents inside, you may need to buy additional insurance for expensive items like jewelry.

Safety and security devices. Installing security systems, alarms or other safety devices such as smoke detectors can lead to an insurance discount.

Credit and past claims. Like auto insurance, credit can be a factor in home insurance premiums, as will past claims.

Renters Insurance Premium Pricing

Factors that influence renters insurance premiums include:

Coverage amount. Your renters insurance coverage amount will be based on the value of the belongings you want to insure. For example, in some cases $20,000 is sufficient to replace your belongings in the event of a disaster. If you own a lot of furniture, decorations and clothing, you’ll need far more coverage.

ZIP code. Risks vary depending on your rental location. For example, urban areas may have higher renters insurance rates because of higher crime rates.

Credit and insurance history. Past claims and poor credit can cause higher rates.

Life Insurance Premium Pricing

Factors that influence life insurance premiums include:

Age. Life insurers look at life expectancy when pricing a policy. The younger you are, the lower your rates will be compared to someone older who’s in the same health.

Gender. Since women tend to live longer than men they enjoy lower rates.

Health. Your weight, medical history and family medical history (parents and siblings) play a significant role in life insurance premiums. Anything that potentially reduces your life expectancy can mean a higher rate.

Lifestyle. A criminal record, history of DUIs or speeding, or a hazardous occupation like a pilot will often factor into life insurance premiums. Credit is also a factor that some insurers use in risk scores.

Policy type. Term life insurance is designed to protect you for a certain amount of time, such as 10, 20 or 30 years. It’s the most affordable type of life insurance. Forms of permanent life insurance cost more because they can stay in-force no matter when you die and often have a cash value component.

Pet Insurance Premium Pricing

Pet insurance is like health insurance for a pet. Pet insurance premiums consider these factors:

Age. When a pet is younger, they are less prone to illness or injury, so pet insurance rates rise as pets get older.

Breed. Some breeds are more predisposed to hereditary conditions than others, increasing the insurance risk and impacting your rate. Also, coverage for dogs is usually more expensive than for cats.

Gender. Insurance data shows that pet parents submit more claims for male pets than for females, so some insurers charge slightly more for male pets.

ZIP code. Because veterinarian costs vary by location, pet insurance costs will differ as well. If you live in a big city, for example, you can usually expect to pay more for coverage.

Travel Insurance Premium Pricing

Factors that influence your travel insurance premium include:

Age. Age can affect the likelihood you’ll submit a travel insurance claim, with older travelers submitting more claims.

Trip cost.  The amount of trip cost you’re insuring is also a primary factor in travel insurance premiums. You want to insure the amount you would lose in pre-paid and nonrefundable deposits.

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With 15 years of immersion in the world of personal finance, Ashley Kilroy simplifies financial concepts for individuals striving toward financial security. Her expertise has been showcased in reputable publications including Rolling Stone, SmartAsset and Money Talks News. She's committed to equipping readers with the knowledge needed to achieve their financial goals.

Amy Danise is the managing editor for the insurance section at Forbes Advisor, which encompasses auto, home, renters, life, pet, travel, health and small business insurance. She is a highly experienced editor, writer and team leader with an extensive background in the insurance sector. With a career spanning more than three decades, she has focused her work on consumer-oriented publications.

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SunTrust Finalizes Sale of Premium Assignment Corporation

Dec 4, 2017

ATLANTA , Dec. 4, 2017 /PRNewswire/ -- SunTrust Banks, Inc. (NYSE: STI) today announced it has finalized the sale of the company's commercial lines insurance premium finance subsidiary, Premium Assignment Corporation (PAC), to IPFS Corporation. The sale was initially announced in September.

"We congratulate IPFS on the purchase of PAC, and wish our departing teammates well in their work with IPFS. This sale allows SunTrust to continue to focus on our core Wholesale banking businesses, while generating value for our shareholders," said Hugh S. (Beau) Cummins, III , Wholesale Segment executive at SunTrust.

Based in Tallahassee, Florida , PAC has $1.3 billion in assets as of September 30, 2017 , and finances commercial lines insurance premiums in all 50 states. SunTrust acquired PAC via the 1994 purchase of Regional Investment Corporation, parent company of Andrew Jackson Savings Bank.

SunTrust Robinson Humphrey, Inc. and Colonnade Securities, LLC served as the financial advisors to SunTrust. Lazard served as the financial advisor to IPFS Corporation.

About SunTrust Banks, Inc. SunTrust Banks, Inc. is a purpose-driven company dedicated to Lighting the Way to Financial Well-Being for the people, businesses, and communities it serves. Headquartered in Atlanta , SunTrust operates an extensive branch and ATM network throughout the high-growth Southeast and Mid-Atlantic states, along with 24-hour digital access. Certain business lines serve consumer, commercial, corporate, and institutional clients nationally. As of September 30, 2017 , SunTrust had total assets of $208 billion and total deposits of $163 billion . The Company provides deposit, credit, trust, investment, mortgage, asset management, securities brokerage, and capital market services. SunTrust leads onUp, a national movement inspiring Americans to build financial confidence. Join the movement at onUp.com.

SOURCE SunTrust Banks, Inc.

For further information: Tom Crosson, 470-218-9178

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