Definition - What does Financed Premium mean?
A financed premium refers to a loan provided by a third party to a company or individual to cover the individual’s insurance premiums. Often, the insurer or brokerage offer such financing options as well. Typically, the financing company would pay for premium and charge the insured on a monthly repayment plan.
Insuranceopedia explains Financed Premium
With a financed premium, the insured party eliminates the need to pay large sums up front to an insurance company for coverage. For instance, a newly registered company needs health insurance coverage for its employees. The sum expected may be too much for management to pay upfront from the company’s financial reserves; thus, they may require a loan with reasonable terms, such that the financial burden is lessened.
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