Compensating Balances Plan

A compensating balance plan is an insurance policy with a flexible premium plan.

It works like this:

The insurance company receives the premium payment from Inflate-a-Date, Inc., deposited into a separate account owned by the insurance company.

Inflate-a-Date has access to the account and can use the funds for operating expenses. It can subtract the costs of operating expenses from the premium requirement, which lowers the cost of insurance.

This plan is truly having your cake and eating it, too. If insurance was a cake, that is.