Life insurance premium financing is a financial tool that many ultra-high-net-worth individuals are taking advantage of to help secure the coverage and protection they want and need. However, this approach can be quite intricate, as there are endless scenarios for structuring a life insurance premium financing policy. It’s important to implement this complex strategy with a trusted and experienced team on your side.
Chamberlin Financial and our team of specialists understand the importance of using leverage to acquire the life insurance their clients need, while also growing their net worth. We create highly-personalized and tailored premium financing designs for each of our clients.
Taking advantage of an insurance company’s crediting rate that may outperform the borrowing costs.
Potentially reduce or eliminate the out-of-pocket cost for life insurance.
An opportunity to outperform the borrowing cost through money saved by not paying the premiums.
HOW IT WORKS
Upon receiving loan approval from a premium finance company, the client will post collateral to qualify for the loan. The initial loan amount is dispersed to the insurance company, which in turn pays the first premium on the policy.
The life insurance policy is typically owned by an Irrevocable Life Insurance Trust. The client will name the trust beneficiaries which may include a spouse, children, other heirs, business partners or a charity. The trust will refund premiums and any outstanding interest to the bank, who will continue to disperse funds according to the premium schedule.
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