Strategies

Premium Finance Strategies

Capital Crest Financial Group’s partnerships with lenders and carriers propel its life insurance premium finance platforms to among the top in the industry. Capital Crest Financial Group offers its clients and advisory partners years of expertise and experience coupled into two main sectors: (1) individual financing, including (i) accumulation and (ii) estate planning; and (2) business financing.

Individual financing can be achieved domestically and offshore in the right circumstances.

 

Premium Finance for Accumulation

Our clients are the healthy, wealthy and wise. For estate accumulation and future legacy planning allowing for full benefits, use of cash value in the policy and retaining death benefit for beneficiaries, the profile is 29-55, good or better health, strong cash flow and a net worth of 5MM or greater.

For the younger client, the potential for tax deferred accessible monetary growth and living benefits coupled with death benefit coverage in insurance policies can be an attractive proposal. Having to stroke a check to satisfy huge insurance premiums to do so can be an unsettling reality for most. Not anymore – we can finance those premiums! Let’s look at our options to purchase in general. From our dinner we’re eating tonight to our million-dollar home, we can pay in one of two ways – cash or credit. We’re comfortable with the idea of borrowing money at a small interest rate to purchase goods or services so we are able to retain the use of our own money. With premium finance, we are able to do just the same AND repay the loan through the cash build up within the policy over time OR when we pass on, the lender is repaid from the death benefit and the balance passes to our beneficiaries.

Instead of paying for insurance with a stream of payments over our lifetime, let’s look at how financing may be a better alternative. We will leverage a loan from a lender (at a low interest rate) to put as much money in your whole life or indexed insurance policy (typically for 5 or 7 years) as possible and let that money grow. Instead of the client servicing the premium, the client will service only the interest on the loan! Depending on how much interest is paid, market climate and policy performance, we can estimate between 10-15 years that there will be sufficient growth in the insurance vehicle to repay the loan from the cash in the policy. Now the lender is repaid and you have a fully funded policy to last for your entire life!

This concept turns the entire perception of life insurance on its head.

 

Premium Finance for Estate Planning

Our clients are the healthy, wealthy and wise. For estate accumulation and future legacy planning allowing for full benefits, use of cash value in the policy and retaining death benefit for beneficiaries, the profile is 29-55, good or better health, strong cash flow and a net worth of 5MM or greater.

For the younger client, the potential for tax deferred accessible monetary growth and living benefits coupled with death benefit coverage in insurance policies can be an attractive proposal. Having to stroke a check to satisfy huge insurance premiums to do so can be an unsettling reality for most. Not anymore – we can finance those premiums! Let’s look at our options to purchase in general. From our dinner we’re eating tonight to our million-dollar home, we can pay in one of two ways – cash or credit. We’re comfortable with the idea of borrowing money at a small interest rate to purchase goods or services so we are able to retain the use of our own money. With premium finance, we are able to do just the same AND repay the loan through the cash build up within the policy over time OR when we pass on, the lender is repaid from the death benefit and the balance passes to our beneficiaries.

Instead of paying for insurance with a stream of payments over our lifetime, let’s look at how financing may be a better alternative. We will leverage a loan from a lender (at a low interest rate) to put as much money in your whole life or indexed insurance policy (7 years) as possible and let that money grow. Instead of the client servicing the premium, the client will service only the interest on the loan! Depending on how much interest is paid, market climate and policy performance, we can estimate between 10-15 years that there will be sufficient growth in the insurance vehicle to repay the loan from the cash in the policy. Now the lender is repaid and you have a fully funded policy to last for your entire life!

Business financing is embedded within The Palisades Pension Plan, brought to you exclusively by Capital Crest Financial Group. The Palisades Pension Plan allows employers to borrow funds to pay for their key-man or buy-sell insurance policies.

 

Premium Financing for your Business

By investing in a company owned permanent life insurance policy, business owners may be able to fund a current income for themselves, as well as retain any surplus funds inside of their company – while also allowing the funds within their life insurance policy to grow on a tax-deferred basis.

Business owners can use premium financing as a way to have access to a tax-deferred investment vehicle while also having tax-free use of the funds if needed. These individuals find that by using life insurance premium financing, they can not only take advantage of tax-deferred growth on the cash value build up inside the plan, but also have a set amount of life insurance protection for their loved ones in the future.

Those who are a partner or owner of a business may also be able to use life insurance in this way in order to cover the loss of key employees or to fund a buy-sell agreement; which essentially may help to protect their company upon the death of the owner or other key executives.

By using premium financing on a permanent life insurance policy, business owners have the flexibility to access the protection, the security of tax-deferred investments, and the liquidity that is needed in the business environment. In addition, the funds can also typically be used for personal benefit as well.

Enter The Palisades Pension Plan. Through Capital Crest Financial Group’s exclusive program, business can set these plans up pursuant to a vesting schedule to ensure retention of their top employees. This strategy may also increase the profitability of the company by way of these permanent life insurance policies and the cash associated with them.

 

Further Services

In addition to the uses above, Capital Crest Financial Group is able to assist clients and their advisors in other structures including: advance estate and business planning, Captive Insurance, trusts drafting for premium finance and other uses, and our CPA may provide assistance with audits, financial statements, and gathering documents to be used in consideration of premium financing. Contact us to learn more today!