Capital Premium Financing
Capital Premium Financing was founded in 1988 by David F. Gabrielsen, who learned how to finance premiums from his father, Ron. The company started in the basement of David’s home and has since grown into a recognized leader in the premium finance loan industry. David continues to manage relationships with agents today, and the company’s management team has over 150 years of collective experience in commercial banking, investment portfolio management, and financial institution regulation.
Capital Premium Financing has built an excellent reputation for service and product innovation in the premium finance loan industry. The company is known for its unique service options and exclusive profit-sharing programs. Clients and agents have praised Capital Premium Financing for its exceptional customer service, prompt responses to inquiries, and competitive offerings. The company is endorsed by the Missouri Association of Insurance Agents, which highlights its strong reputation in the industry.
Capital Premium Financing has a strong leadership team in place, with more than 150 years of collective experience between commercial banking, investment portfolio management, and financial institution regulation
Premium financing is the lending of funds to a person or company to cover the cost of an insurance premium. It is often provided by a third-party finance entity known as a premium financing company, although insurance companies and insurance brokerages occasionally provide premium financing services through premium finance platforms. Premium financing is mainly devoted to financing life insurance, which differs from property and casualty insurance. The main benefit of premium financing is avoiding the opportunity cost of paying out of pocket. By using other people’s money (leveraging a lender’s capital), clients can retain a significant amount of capital known as retained capital.
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Pros and Cons from an Insurer Perspective
Advantages
- **Increased sales**: Offering premium financing options can help insurers attract more clients and sell larger policies.
- **Customer retention**: Premium financing can help insurers retain clients by making insurance more affordable and manageable.
- **Reduced risk**: Insurers can reduce their risk exposure by partnering with premium financing companies that have strong underwriting and risk management practices.
Disadvantages
- **Increased complexity**: Offering premium financing options can add complexity to the insurer’s operations, requiring additional resources and expertise.
- **Potential for default**: Insurers face the risk of clients defaulting on their premium financing loans, which could result in the loss of the insurance policy and its associated benefits.
Pros and Cons from a Client Perspective
Advantages
- **Cash flow management**: Premium financing allows clients to spread out the cost of insurance premiums over time, avoiding large upfront payments and managing their cash flow more effectively.
- **Retained capital**: Clients can retain a significant amount of capital by using premium financing, which can be invested in other areas for potentially higher returns.
- **Affordability**: Premium financing can make it more affordable for clients to purchase the coverage they need.
Disadvantages
- **Increased cost**: The interest and fees associated with premium financing loans can add to the overall cost of the insurance policy.
- **Risk of loan default**: Clients face the risk of defaulting on their premium financing loans, which could result in the loss of the insurance policy and its associated benefits.
Real-world Scenarios and Outcomes
- **Business growth**: A business owner uses premium financing to purchase a large life insurance policy, allowing them to retain more capital for business growth and investment.
- **Estate planning**: A high-net-worth individual uses premium financing to purchase a large life insurance policy for estate planning purposes, avoiding the need to liquidate assets and potentially triggering capital gains taxes.
- **Loan default**: A client defaults on their premium financing loan, resulting in the loss of their insurance policy and its associated benefits.
Capital Premium Financing offers both advantages and disadvantages for insurers and clients. Insurers can benefit from increased sales and customer retention, while clients can enjoy better cash flow management and retained capital. However, both parties face risks, such as increased complexity for insurers and the potential for loan default for clients. Real-world scenarios demonstrate the potential benefits and risks associated with premium financing, highlighting the importance of carefully considering the pros and cons before entering into a premium financing arrangement.
Services and Payment Options
Capital Premium Financing offers a variety of payment options for clients, making it convenient for them to manage their loans and make payments. These options include:
- **Online Payments**: Clients can make payments online using ACH or credit card through the company’s website.
- **Payments by Phone**: Clients can make payments over the phone.
- **Payments by Mail**: Clients can send their payments through the mail to the company’s designated address.
- **Mobile App**: Capital Premium Financing has a mobile app available for both Android and iOS devices. Through the app, clients can view loan details, make payments, set up payment reminders, and contact customer service.
- **E-Signature and Paperless Agreement Options**: The company offers e-signature and paperless agreement options for clients, making the process more efficient and environmentally friendly.
- **Text Notifications**: Capital Premium Financing provides text notifications for past due, intent to cancel, and cancel notices, ensuring clients are informed about their loan status.
These various payment options and services make it easy for clients to manage their premium financing loans and stay up-to-date with their payments.
Entrepreneurial Roots and Future Growth
Capital Premium Financing was founded in 1989 by David Gabrielsen, who had a background in finance and insurance. The company has remained true to its entrepreneurial roots, driven by innovation and a commitment to providing value to its clients. Capital Premium Financing has experienced strong, consistent growth as it has expanded nationwide.
Looking to the future, the company is well-positioned for continued growth and expansion. Capital Premium Financing has a strong leadership team in place and a deep bench of experienced professionals. The company is committed to staying at the forefront of the industry, investing in technology and innovation to better serve its clients. By focusing on these areas, Capital Premium Financing aims to maintain its reputation as a leader in the premium finance loan industry and continue to provide exceptional service and unique offerings to its clients.
Agency Funding Participation (AFP) Programs
Capital Premium Financing has developed a series of proprietary programs for insurance agencies, allowing them to participate in the funding of premiums and earn interest on their investments. These programs include:
- **AFP Contract Funding™**: This program is a proprietary float management system that enables agencies to earn interest on float balances created by the timing difference between the effective date of insurance policies and the remittance date of corresponding premiums. The AFP Contract Funding™ Program is an automated payment remittance service with monthly reporting tools that facilitate efficient cash flow management.
- **AFP Flex-Plan™**: This program allows insurance agencies to co-fund a portion of the premiums they finance by placing funds into a profit-sharing account with Capital Premium Financing. The profit-sharing account earns interest significantly higher than traditional financial institution saving accounts. Participants in the AFP Flex-Plan™ have full liquidity of funds.
- **AFP Max-Plan™**: This is a proprietary annual program that enables insurance agencies to co-fund a portion of the premiums they finance by placing funds into a profit-sharing account with Capital Premium Financing. The profit-sharing account earns interest based on loans generated by agencies. The AFP Max-Plan™ is an annual program with limited liquidity.
These AFP programs provide insurance agencies with opportunities to participate in premium funding and earn interest on their investments, contributing to their financial growth and stability.
The Client’s Perspective on Capital Premium Financing
Clients who choose Capital Premium Financing for their insurance premium financing needs expect a variety of benefits and services. Some of the key expectations include:
- **Flexible payment options**: Clients appreciate the convenience of multiple payment options, such as online payments, payments by phone, payments by mail, and a mobile app for managing loan details and making payments.
- **Exceptional customer service**: Clients expect responsive and helpful customer support, including assistance with FinancePro, live service during business hours, and 24/7 online access.
- **Transparency and clear communication**: Clients need a thorough understanding of the premium financing process, including the benefits, risks, and costs associated with the financing arrangement.
- **Tailored solutions**: Clients expect personalized financing solutions that cater to their unique financial situations and insurance needs.
Strategies for Effective Communication and Explanation of Capital Premium Financing to Clients
To effectively communicate and explain Capital Premium Financing to clients, consider the following strategies:
- **Educate clients**: Provide clients with a clear understanding of premium financing, its benefits, and potential risks. Explain how premium financing can help them manage cash flow, retain capital, and afford the coverage they need.
- **Highlight unique offerings**: Emphasize the unique services and programs offered by Capital Premium Financing, such as the Agency Funding Participation (AFP) programs, which allow insurance agencies to participate in the funding of premiums and earn interest on their investments.
- **Discuss payment options**: Inform clients about the various payment options available, making it easy for them to manage their loans and make payments.
- **Provide exceptional customer support**: Offer responsive and helpful customer support through various channels, such as phone, email, and online access.
- **Build trust**: Establish trust with clients by being transparent about the financing process, fees, and interest rates, and by addressing any concerns or questions they may have.
By understanding client needs and expectations and employing effective communication strategies, you can help clients make informed decisions about Capital Premium Financing and ensure a positive experience.
Customer Support and Assistance
Capital Premium Financing offers customer support and assistance through various channels to help clients manage their premium financing needs. They provide assistance with FinancePro, a tool for managing premium financing, by phone at (877) 730-1906[3]. Additionally, they offer live customer service 12 hours a day, 5 days a week, ensuring clients can get the help they need during business hours. For clients who prefer online access, Capital Premium Financing provides 24/7 access to their website, CapitalPremium.net, where clients can manage their accounts, make payments, and access other resources.