Glossary
Loan to Value (LTV)
The ratio of a life insurance policy's secondary market value or asset value in relation to the premium finance loan amount. The LTV tells the premium finance lender what amount of risk exposure they have in the event of a default or non-payment by the borrower. I.e. an 85% LTV leaves the lender with a 15% risk exposure as the asset value is 15% less than the amount of the loan and they will therefore want to obtain a personal guarantee or posted collateral that will cover this risk exposure.
It is the intent of Premium Finance to provide accurate and complete information regarding the definitions contained within the glossary of our website and although every effort has been made to ensure the accuract or completeness of this information, Premium Finance direct does not warrant or represent the accuracy or completeness of this information, but rather intends that this information be used as an informal resource guide. Most importantly, it is recommended that you consult with your insurance carrier(s) and your own insurance, legal and tax professionals regarding questions regarding new or existing life insurance coverage.