Financed Premium

What Does Financed Premium Mean?

A financed premium refers to a loan provided by a third party to an individual or company to cover their insurance premiums. Often, insurers or brokerages offer such financing options as well. In this arrangement, the financing company pays the premium on behalf of the insured and then charges them a monthly repayment plan.

Insuranceopedia Explains Financed Premium

With a financed premium, the insured party can avoid the need to pay large sums upfront to an insurance company for coverage. For example, a newly registered company may need health insurance coverage for its employees, but the total amount required could be too high for management to pay out of the company’s financial reserves. In this case, they may seek a loan with reasonable terms to help alleviate the financial burden.