Premium Financing Life Insurance

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Leverage Your Money With Premium-Financed Life Insurance!

What Is Premium-Financed Life Insurance?

It is borrowing money from a bank to pay the premiums for a very large Life insurance policy. Then, as the policy builds cash value in later years, the policy-owner can pay back the bank loan from the cash value inside the life insurance policy.

This practice is widely accepted amongst insurance companies.  However, finding the right combination of bank and insurer that specializes in premium financing is the key.  Consumers generally will need to a net worth of at least $5 million to participate.

Why Would I Consider Premium-Financed Life Insurance?

With premium-financed life insurance, you can acquire substantially more life insurance for a small fraction of the cash flow outlay normally needed to support this size policy.

Premium financing can be an attractive option for anyone who:

  • Needs a substantial amount of life insurance for estate planning, wealth accumulation, liquidity at death, asset protection, or business purposes.
  • Does not want to use their existing capital to pay the premiums.
  • Is in good health.
  • Satisfies the insurance carriers’ underwriting guidelines.

How Premium-Financed Life Insurance Works:

Life insurance premium financing diagram

One thing that successful investors and business executives understand very well is the power of leverage to create wealth.  For many whom need large Life policies, premium financing can greatly reduce out-of-pocket expense and preserve capital for other investment activities.  Premium financing may also offer tax benefits to their estate.  For example, when financing a policy, one may employ an irrevocable life insurance trust.  The trustee of the trust names the beneficiary(s) of the policy.  Upon the death of the insured, the trust beneficiary(s) are paid, according to the stipulations of the trust.  The insurance proceeds will have no tax liability.

To learn more about the advantages and risks of Premium-Financed Life Insurance, request your free guide today.  Simply fill out and submit the form below and we will e-mail your guide without delay.

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