Cash Flow Plan
What Does Cash Flow Plan Mean?
A cash flow plan is a strategy in which a policyholder utilizes an existing cash flow stream to finance their insurance premiums. It can also refer to an insurance company’s assessment of its income streams and expenses, along with its plan to ensure that its cash flow exceeds these expenses.
Insuranceopedia Explains Cash Flow Plan
Cash flow is crucial for both policyholders and insurance companies because it provides financing for both parties. For policyholders, cash flow can be generated by the policy itself, as is commonly seen with life insurance policies that include investment components. For insurance companies, cash flow is typically generated through premium payments and investments.
Cash flow plans assist both policyholders and insurance companies in effectively utilizing their cash flow sources.
