Simple answers to frequent questions

Multi Pay Finance Life Insurance
Frequently Asked Questions
What would you like to know?

Find out how Capital for Life’s Premium Multi Pay Financing for Life Insurance works. Read our frequently asked questions (FAQs) and discover a new way to pay for your life policy.

  • What is multi pay premium finance life insurance?

    Multi-pay premium finance allows the cost of buying a life insurance policy to be spread over a period of time. For example, a life policy purchase may be paid for through a series of regular premiums over 5, 10, 15 years or even longer.

    By not paying all of the premium up front, it allows a policy purchaser to use the capital that would have been invested in a single up front premium to be used for other investments. From a cash flow perspective, it also helps the life policy buyer to plan their personal or business cash flow payments more easily.

    However, multi-paying a life insurance policy comes with an additional cost which is determined by the insurer at the start of the policy. The cost is usually in the form of a higher overall premium being charged by the insurer, which varies depending upon the length of multi-payments selected.

  • What are the benefits of Multi-Pay Premium Finance for Life Insurance?
    • Low up front cost to buy a life policy.
    • Higher life cover can be afforded by spreading the cost of buying a life policy across multiple payments.
    • Cash saved by not paying a single premium upfront can remain invested with the aim of growing that money more quickly than the higher cost of paying a single premium.
    • No further premium payments are required if the life insured dies during the regular premium period.
  • What are the drawbacks of Multi-Pay Premium Finance for Life Insurance?
    • Higher overall cost than paying a single premium for a life insurance policy up front.
    • Increased chance a life policy lapses when a policy owner is required to pay premiums over a number of years. If a policy lapses, the life insured may lose the cover and no death benefit is payable.

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