Premium Financing

Premium financing is an advanced wealth preservation tool used by high net worth individuals in need of a large life insurance policy ($10 million or more) for income or estate planning needs. Policy holders use a bank loan to pay for the early year premiums verses using their own money. By financing the policy instead of liquidating assets, owners obtain the desired protection without high out-of-pocket costs. It’s even possible to fund an entire policy without having to write a single personal check for the annual premiums.

Here’s an example of how it works.   Let’s say Bill, age 65, wants to protect his estate from taxes with a $15m million life insurance policy. Premiums on a $15 million policy can run into hundreds of thousands of dollars a year. Rather than paying the premium directly, a commercial bank pays Bill’s premiums and Bill uses part of his stock portfolio as collateral for the loan. When done correctly, the cash value growth inside the policy pays off the bank loan and funds the policy for the rest of Bill’s life. Here’s the best news. Bill never has to write a premium check. Once the bank loan is covered, his stock is released as collateral.

Advanced Wealth Preservation works with the top banks, insurance and financial institutions for your premium financing needs. Our conservative approach combines high cash value life insurance with low-cost loans not available to the general public. We work with some of the largest and most highly-rated life insurance companies in the U.S. offering products that can provide substantial cash value accumulation. These products have historically exceeded the projected borrowing costs for the life insurance policy.

Call us today to see how premium financing can enhance your income or estate planning needs. After all, what’s better than using other people’s money.