Many commercial insurance policies require the annual premium to be paid rather than providing interest-free monthly instalments directly from the insurer.

Where monthly payments are required, premium funding can be used.

How Premium Funding works #

Premium funding is a separate finance agreement used to pay insurance premiums.

The premium funder generally pays the insurance premium and the client repays the funder by instalments.

Because premium funding is finance, the agreement can include:

• Interest
• Fees
• Charges relating to missed or failed payments

The applicable costs are set out in the funding agreement.

The funding arrangement is separate from the insurance policy. It finances the premium rather than changing the policy’s coverage.

Other points to consider #

Depending on the funding arrangement, multiple eligible policies can sometimes be included in one agreement.

Whether premium funding is appropriate depends on the business’s circumstances and cash flow preferences.

Clients should review the funding agreement, repayment schedule, interest and fees before proceeding.

Contact our team if you would like to discuss the available payment options for your insurance.