Premium Financing at a Glance

Premium Financing at a Glance

April 19, 2016


“PremiumLife Plusinvolves the lending of funds to a person or company to cover the cost of an insurance premium.”


Top Reasons to Finance Life Insurance Premiums


Leverage– Most self-made millionaires are comfortable leveraging their assets and have used that to create wealth. Premium finance permits clients to leverage their current assets and the policy’s cash surrender value to obtain the coverage they need.


Tax Savings– By paying interest instead of premiums and structuring ownership of the life insurance properly, clients can minimize gift and estate taxes. Premium financing can help clients use more of their annual gifting exclusions rather than tapping prematurely into lifetime exemptions.


Retained Capital – Many high net worth clients earn double-digit returns on their investments, be it in their business, real estate or investments. Premium finance allows those clients to keep their money working for them in those high returning asset classes.


Increased IRR – Utilizing premium finance reduces client outlay in the early year’s thereby increasing long term IRR.


The Ideal Client


 Net worth of $5,000,000 or more

 Insurable at Standard or better, with no table ratings

 Client who understands leverage

 Estate planning, charitable planning & tax-free cash