How Premium Financing Increases Cash Flow

Premium Financing

Jason McCarty of Premium Assignment Corporation

Premium Financing Introduction

Most medical malpractice insurance companies require payment in full in order to bind coverage. Even though the premium amount may be small, physicians may want to spread payment of the premium over the calendar year. We are grateful to have found Jason McCarty, our representative with Premium Assignment Corporation.

Premium financing through Premium Assignment Corporation has become part of our team in helping our insureds secure financing for their insurance premiums.  We experience and appreciate Premium Assignment Corporation’s top-notch service that enable us to meet our clients’ needs.

Here are a few examples of how they help our clients:

  • Competitive Rates – Even when the insurance company provides premium financing
  • Free Online and By-Phone Payments
  • 24 Hour Online Client Access to Loan Information

We have asked Jason McCarty to write the following guest post for our blog to enlighten our readers on how premium financing works.


Premium Financing 101

Today there is an installment plan for most forms of insurance. Home, Auto, Life and some basic forms of commercial insurance are all written in what we call direct bill. That is to say your independent insurance agent finds a company that offers you proper coverage through an insurance carrier and they will bill you monthly or quarterly if you so choose for a few dollars more a month.  You can compare this to perhaps your personal auto policy.

When it comes to Medical Malpractice insurance and other forms of insurance, the direct bill option is not always there.  Thus, the need for a premium finance company.  In essence a bank that understands the insurance business and will loan your business money for the sole purpose of paying for your insurance premium.


Advantages to Premium Financing

There are several advantages to using a premium finance company:

    • For starters it frees up capital so you may reinvest it into your own business. Premium financing is a secured loan as the finance company will hold the policy as collateral. They take over the policy using power of attorney. If you don’t make your payments then they will cancel the policy and the return premium will be sent to them. This eliminates the risk of the loan.


    • It is only reported to the credit industry if the policy cancels and is not paid off thus the bank is often unaware of the transaction. This is important to mention as it won’t be reflected as an outstanding loan in any applications for additional credit.


    • Premium Financing offers much lower interest rates than credit card interest rates.


  • Premium Financing is flexible.  Your agent will help create finance options for your down payment and number of installments so that paying your premium is affordable.


About Jason McCarty

Jason is a Regional Account Manager for Premium Assignment Corporation, a Sun Trust Company.

Do you have any questions about financing your medical malpractice premium? If so, we’d love to hear from you. Just leave a comment below or send us an email.

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