In order to keep your money working for you, you finance your largest assets through a bank or lender.  You may not have known that you can do the same thing with high-end life insurance policies.  This way, you can protect your estate and your legacy while keeping your cash on hand to invest where you like.  Let’s break it down a bit further.

Let’s assume that you have an estate that requires 10 million dollar’s worth of protection.  Traditionally, you might require a life insurance policy with annual premiums of around $500,000 dollars.  $500k is money that you could be investing in the market, real estate, or family needs.  This is where premium financing steps in.

• Working with your financial advisor, you could structure a financing agreement where the Lender pays your policy premium over 5 years.
• The lender pays $500k per year towards your premiums for 10 years.
• In year one you might pay interest of 3% to the Lender of $15,000.
• This frees up $485,000 dollars the first year, that you would have been paying towards your premiums.
• As the loan matures additional liquidity will be recognized.
• The premium finance loan must be fully collateralized at all times and will include standard loan terms and conditions.

This is a perfect solution for high-net-worth individuals who want to keep their financial options open while protecting their assets and family.   In this scenario, everybody wins.  The lender is financing with a guaranteed return, the insurance carrier is selling a substantial policy, and you are able to protect a large estate without burdensome out-of-pocket cash being tied up in premiums.

Premium financing involves complex and high-level negotiations with lenders and carriers.  Insurative has decades of experience handling these proceedings.  Contact us to learn how your estate planning could benefit from a premium financing solution.