Premium Financing

What is it?

High Net Worth Clients have high liquidity needs at death, but often their assets are tied up in real estate, businesses, or other illiquid investment vehicles.

Often their estate is subject to both federal estate tax and state estate tax with a potential of 50% or more.

Using minimal collateral, the client secures the loan to finance the life insurance premiums. Examples of collateral range from real estate to stock holdings.

Leveraging today’s low interest rates into high cash value insurance utilizing whole life or index universal life makes sense.

Premium Financing

A necessary tool for a rainy day

This strategy can provide a high net worth individual with an alternative to a traditional life insurance platform. Financing your premium can be helpful in cases where a permanent death benefit is needed and immediate cash flow is constrained.

Clients should seek the advice of their tax advisor and counsel to review all facets of this concept before entering into any agreement with a lender.