Premium Finance Life Insurance
Our premium financing life insurance solutions allow you to leverage your assets to obtain significant life insurance coverage without disrupting your cash flow or financial stability.
Maximizing Coverage, Minimizing Out-of-Pocket Costs
Our premium financing life insurance solutions allow you to secure substantial coverage without liquidating assets, ensuring your financial stability and growth.
Ideal Candidates for Premium Financing:
✓ High net worth individuals ($5 million or more)
✓ Significant life insurance needs
✓ Favorable insurability
✓ Sophisticated investors with adequate liquidity for collateral
✓ Minimum annual premium of $500K
A Strategic Approach to Life Insurance Funding
What is Premium Financing Life Insurance?
Premium financing life insurance is a cost-effective method utilized by affluent individuals to pay for a life insurance need over a specific period without hindering cash flow or financial position. This strategy involves borrowing premiums through a collateralized loan from a reputable lender, with the policy cash value as the primary collateral. Additional collateral may be required, including cash, pledged securities, or other acceptable assets. In the event of the insured’s demise before loan repayment, the loan is settled from the policy proceeds.
A Step-by-Step Guide to Premium Financing
Steps to Implement Premium Financing Life Insurance
- Initial Consultation:
- Discuss with a Greco & O’Neal Wealth Strategies partner to determine suitability.
- Proposal Review:
- Receive a premium financing proposal tailored to your client’s needs.
- Underwriting:
- Gather financial and medical records for underwriting.
- Obtain informal medical underwriting from multiple carriers to choose the best option.
- Loan Options:
- Present loan options with typical commitments of 5-10 years.
- Approval and Funding:
- Post collateral, make required interest payments, and fund the policy premium.
- Annual Reviews:
- Conduct simple annual reviews with the lender to monitor progress.
- Loan Repayment Options:
- Pay out-of-pocket at any time.
- Use a policy loan to repay the bank loan.
- Combine the above options for flexibility.
Maximizing Advantages While Managing Potential Risks
Understanding the Benefits and Risks of Premium Financing
Benefits:
- Obtain significant life insurance coverage without liquidating assets.
- Preserve cash flow and financial stability.
- Accumulate significant cash value in the policy quickly.
- Flexible loan repayment options.
Risks:
- Adds the cost of interest to the life insurance purchase.
- Creates risks and costs, including adverse policy performance and premium loan rate increases.
- Potential tax implications (gift and income) of paying off premium loans.
Tailored Financing Strategies for Long-Term Success
Our Comprehensive Financing Solutions Cover a Wide Range of Needs
Navigating the complexities of financing requires expert guidance and strategic planning. Our comprehensive financing solutions cover a wide range of needs, from personal loans and mortgages to business loans and investment financing. We work with you to develop a tailored plan that provides the financial support you need at every stage of life. Trust our expertise to help you unlock financial opportunities and achieve your goals.
