WHAT WE DO
Premium Financing
Leveraging Life Insurance
Using other people’s money with the intent to realize a financial gain is a financial concept that has been practiced by real estate developers, investors, business owners and entrepreneurs for centuries. Now, there’s a way to leverage life insurance policies.
Our life insurance financing strategy can deliver significant benefits to life insurance portfolios. Most clients understand the “traditional” way to structure and pay for permanent life insurance through cash payments. By using the same life insurance products and integrating this highly specialized life insurance financing technique, we can demonstrate a potentially more advantageous option.
Our customized life insurance financing strategy delivers a powerful, flexible and efficient option for permanent life insurance premium payments. While most high net worth individuals recognize the benefits of permanent life insurance in estate, business and asset accumulation planning, purchasing a life insurance policy can require significant out-of-pocket premium payments. As with any other large financial commitment, you want to choose the most efficient and cost effective premium payment solution. Our experienced professionals can perform a comparative analysis between your customized life insurance protection strategy solutions against traditional payments to assist in your decision.
The value of Life Insurance Financing
Life Insurance Financing can be an effective and advantageous way for you to pay for the life insurance you need to accomplish your financial objectives.
Key Benefits
Financing your life insurance premiums can deliver significant benefits. It offers you the opportunity to:
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Lower your out-of-pocket payments for permanent life insurance
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Increase the death benefit and cash value performance of your life insurance portfolio
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Provide additional flexibility in your insurance planning
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Reduce the impact on your existing investments and cash flow
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Beneficially restructure your existing permanent life insurance policies
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Improve your cash flow
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Obtain a significant amount of life insurance with limited up-front out-of-pocket costs
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Preserve, maintain and build assets in your existing portfolio by using third party funding to pay life insurance policy premiums
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Leverage your annual gift-tax exclusions or lifetime exemption to transfer other assets estate tax free
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Minimize or eliminate gift taxes on policy premiums if the policy is owned by an irrevocable Trust
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Gain an economic advantage by reducing the out-of-pocket coast of the policy and potentially leveraging the future cash value
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Use the policy cash value as part of the collateral for the loan (additional collateral will be required to secure the loan)
Key Considerations
To make the most of your premium financing arrangement there are potential considerations to know and monitor, such as loan interest rate and policy crediting rate.
Keep in mind that:
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Premium financing is a method of paying for life insurance that you need – not a reason to buy life insurance.
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Loan interest rates can increase, which would result in higher loan interest payments than originally planned.
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Policy crediting rates can fluctuate, which may require additional collateral for a loan.
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Lower than anticipated policy performances may require the need to borrow additional premiums to fund the policy.
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You need to consult with your legal and tax advisors to understand potential tax implications, including estates, gift and income tax.