Premium Finance Benefits
Keep Your Cash & Assets
Rather than using your current cash flow or liquidating employed assets to pay for the premium, these are paid for by a lender.
Immediate Estate Creation
There is no other legal method by which an immediate estate can be created at such a small cost. Earnings, savings, and other investments take a significant amount of time and risk.
State Regulations
Once the policy is paid in full, U.S. State regulations help ensure that life insurance companies meet their obligations to policyholders.
Increased Inheritance
Due to the premiums being leveraged, the policy investment returns are higher than other life insurance products.
Tax Advantages
Because the strategy uses an irrevocable life insurance trust (ILIT), the beneficiaries receive the death benefit free of estate and income taxes. Additionally, the annual contributions to cover the loan interests are normally within the client's annual gift tax exclusion limit.
Less Expensive
Clients only pay the loan interests. The payments are not only small but spread out over a number of years.
Premium Finance allows you to enjoy the greatest amount of wealth, while maximizing your legacy to future generations.
Example:
A 45-year-old businessman with a net worth of $15 million, decides to plan his inheritance and pass $10 million to his beneficiaries; for which he has 3 options:
Direct Inheritance
Transfers $10 million to a savings account.
He keeps $5 million.
(estate tax liability)
Traditional Life Insurance
Purchases a $10 million life insurance policy with a $6 million cost.
He keeps $9 million.
(death benefit exempt from estate tax)
Premium Finance
Purchases a $10 million life insurance policy with a $3 million cost.
He keeps $12 million.
(death benefit exempt from estate tax)
* Dollar amounts in the example above are for illustration purposes only. Each Policy is tailor-made to the client’s age, health, and financial goals; the amounts will vary accordingly.