Life Insurance Disputes & Premium Finance Scams Attorney in Beverly Hills, California
What is a life insurance premium financing scam, and how do these cases typically unfold?
What is a life insurance premium financing scam, and how do these cases typically unfold?
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Premium financed life insurance scams
are often a device that is employed on
high netw worth individuals to try to
sell them what is described to them as
either free insurance or lowcost
insurance or insurance that will pay for
itself. And the mechanism that is set up
is um they’re told that this life
insurance after a period of time will
grow enough cash value that it will pay
for itself and that the insurance policy
can be funded uh with a loan from a
finance company that finance these kind
of things. Generally those kind uh that
type of insurance is only suitable for a
narrow group of people. people who are
in need of insurance right now for a
reason and they cannot finance it in
cash right now and that there’s an exit
strategy for them to pay off the loan in
the next several years either through uh
some sort of liquidity event like uh an
inheritance or the sale of a business or
some other infusion of cash. Death is
never an exit strategy with respect to a
premium finance loan. So if the
insurance agent is telling you that this
is going to pay off and pay for itself
upon your death, it is likely to be a
scam. Generally the uh times that these
are suitable are for those people who
need insurance right now, do not have
the cash to pay for it, but will have
the cash to pay for it in the next few
years. And if you’re not one of those
people, if you are looking at holding on
to this policy for a long time until you
die and paying the insurance premiums,
it is likely a scam.
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Los Angeles, CA commercial litigation attorney Steven Morris talks about insurance premium financing scams, and how these cases typically unfold.
