You fund part. The bank funds part.
Your contribution and a loan pay the premium. Policy rights may be assigned to the lender as security.
You40%
Loan60%
Premium100%
A premium. A loan.
A bigger picture.
Understand how premium financing works. Watch the cash flows. Then put the assumptions to the test.
An interactive guide · Based on your Excel model
The long viewIllustrative · HKD
One policy. Three possible paths.
20years of possibilities
Example premiumHK$1,000,000
Financed at the start60%
A growth illustration, not a forecast or guaranteed cash value.
Follow the money.
Premium financing means borrowing to pay insurance premiums. The loan and the policy are two separate commitments.
Growth is possible. Interest is due.
Policy value can grow while you pay borrowing costs. Non-guaranteed policy benefits and loan rates can change.
PolicyValue
BankInterest
The loan still needs an exit.
An interest-only loan leaves the principal due at maturity. Plan how to repay it without relying on refinancing.
Policy value− debt
Net assets− cash paid
See the whole financial picture.
These figures come from the case open in the P-Fin calculator. Change anything there and this page follows.
Current case
–
Client's own cash–
Monthly interest–
Leverage–policy value per 1 of own cash
Profitable from–
Cash value against what is owed and paid in
Illustrative only. Figures follow the PortfoPlus-style method used in the calculator: an interest-only loan, repaid from the cash value in the year shown.
Look beyond
the headline return.
Borrowing preserves cash at the start. It also creates obligations that policy growth may not cover.
Read the Insurance Authority guide