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Premium Financing

Below are two examples of how our firm has used Premium Financing to provide advanced estate planning options for our clients.  If you have any questions regarding these concepts or would like any additional marketing materials, please contact our Marketing team at 1-800-308-2355.

Charitable Planning

By using a Premium finance strategy a high net worth individual can create a legacy by using variable loans and the death benefit of the life insurance policy.
 

How it works:

An index universal life strategy with conservative return and interest rate assumptions is applied for and issued. The policy is then  overfunded to maximize the cash value and the client pays the first five years of loan interest.  Then, as soon as the policy has enough cash value, we start to pay off the loan.  Once the loan is paid off, the client can take tax free distributions out of the policy and gift them to the charity of their choice.  Another benefit to the charity is that upon death, the charity will receive the death benefit of the policy.

Private Pension

By using a premium finance strategy an executive or high net worth individual can create a private pension by using variable loans.

How it works:

Clients with a 15 year or more horizon until retirement fit the profile for this strategy. An indexed universal life strategy with conservative return and interest rate assumptions is applied for and issued. The policy is then overfunded to maximize the cash value and the client pays the first five years of loan interest. Then, 3 years before retirement, the client starts to pay off the loan and then at retirement the client takes tax free distributions out of the policy.