Our clients are the healthy, wealthy and wise. For estate preservation and legacy planning, while still allowing for full benefits, use of cash value in the policy, and retaining death benefit for beneficiaries, the profile is: 55-85, good or better health, strong cash flow, and a net worth of 5MM or greater.
Having to write a check each year for large insurance premiums for your estate plan can be difficult but necessary. Did you know we can finance those premiums! Let’s look at our options to purchase in general. Most are 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 from an outside source OR upon death of the insured, the lender is repaid from the death benefit with the remainder passing to 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 7 or 10 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 the amount of annual interest contributed by the client and policy performance, loans are anticipated to be repaid around 15-20 years. Once the lender is repaid, you have a fully funded policy structured for life!
Life insurance premium finance turns the concept of life insurance on its head.