In this video, Steven Morris, partner at Quantum Law Group, explains the risks of premium financed life insurance scams and why they are often unsuitable for most individuals. These schemes are typically marketed to high-net-worth clients as “free insurance,” “low-cost insurance,” or insurance that will “pay for itself.” The sales pitch promises that the policy’s cash value will grow enough to cover future premiums, funded through a loan from a finance company.
The reality is that these arrangements are only appropriate in very narrow circumstances. According to Steven Morris, premium financed life insurance is suitable only for clients who:
— Have an immediate need for life insurance coverage
— Cannot pay premiums in cash right away
— Expect to have a clear exit strategy within a few years, such as an inheritance, sale of a business, or another liquidity event
If you are told that the loan will be repaid through your death benefit, it is almost certainly a scam. Death is never a legitimate exit strategy for financing life insurance. For most clients, holding a financed policy long-term becomes unsustainable, leading to policy collapse, massive debt, and litigation.
Why premium finance life insurance is risky
— Policies are often sold with unrealistic assumptions about cash value growth
— Clients may face ballooning loan obligations they cannot repay
— Policies can lapse, leaving clients without coverage and with significant debt
— Families may be left financially exposed and forced into costly disputes
How Quantum Law Group helps clients
— Representing policyholders, beneficiaries, and families harmed by premium finance scams
— Litigating life insurance disputes and bad faith denials
— Pursuing claims against insurers, brokers, and financial institutions involved in misconduct
— Negotiating settlements to recover benefits and damages for clients
— Advising high-net-worth individuals on avoiding unsuitable life insurance arrangements
About Quantum Law Group
Quantum Law Group is a Los Angeles-based litigation and trial law firm with decades of experience representing individuals and businesses in complex disputes. Our attorneys, including partners Steven Morris, Jonathan M. Deer, and Peyman Cohan, are known for their courtroom strength, collaborative approach, and ability to take on cases other firms may avoid.
We serve clients throughout Southern California, including Los Angeles, Beverly Hills, Santa Monica, Pasadena, Downtown LA, South Bay, and Long Beach.