In this video, Jonathan M. Deer, partner at Quantum Law Group, explains the hidden costs in life insurance premium finance deals that are often not disclosed to clients. These arrangements are pitched as low-cost or “free” insurance strategies, but in reality, they carry significant financial risks.

Jonathan highlights three major categories of hidden costs that clients frequently overlook:

Hidden costs in premium finance life insurance
— The cost of financing itself, which is typically substantial and ongoing
— The cost of collateral, which is tied up for the life of the policy and effectively removes those assets from use
— The cost of the insurance itself, which can increase significantly over time due to rising costs of insurance and policy performance issues

These costs are often minimized or ignored during sales pitches, but they make a dramatic difference in whether a premium finance deal makes sense. Without a clear understanding of these factors, clients may find themselves locked into unsuitable policies, losing access to assets, and facing unsustainable expenses.

Risks of premium finance deals
— Overly optimistic assumptions about cash value growth
— Policies designed with rising long-term costs
— Collateral requirements that undermine liquidity
— Financing structures that create large debt obligations
— Lack of clear exit strategies for repayment

How Quantum Law Group helps clients
— Analyzing life insurance premium finance arrangements for hidden risks
— Litigating disputes and fraud claims against insurers, brokers, and lenders
— Challenging bad faith conduct and wrongful denials of life insurance claims
— Recovering compensation for policyholders and beneficiaries harmed by unsuitable policies
— Advising families, professionals, and business owners on avoiding risky deals