A strategy that allows high-net-worth individuals to leverage third-party loans to pay life insurance premiums — preserving capital for other investments while maintaining comprehensive life insurance coverage.
Instead of pulling money out of your portfolio to fund large premiums, premium financing lets a third-party lender carry that burden — so your assets keep working.
Borrow funds to pay premiums instead of using personal assets
Maintain capital available for investment opportunities
Avoid forced liquidation of existing investments
Create substantial death benefits for estate tax payments
You keep control of your capital. A lender funds the premiums. The policy's cash value growth is designed to eventually offset the loan — and the death benefit passes to your heirs tax-free.
Unique advantages for wealth preservation and growth.
Borrow funds to pay premiums instead of using personal assets. Keep capital available for investment opportunities.
Preserve liquid funds for other personal or investment uses. Prevent tax consequences from selling assets prematurely.
Create substantial death benefits for estate tax payments. Enable significant wealth transfer to heirs.
A large death benefit provides family security. Efficient wealth transfer preserves inheritance.
A high-net-worth individual borrows from a third-party lender to pay the premiums on a large permanent life insurance policy, rather than paying out of their own assets.
The policyholder applies for a substantial permanent life insurance policy, often with a death benefit in the millions or tens of millions of dollars. Common policy types used are indexed universal life (IUL) or whole life insurance.
Instead of paying the large premiums out-of-pocket, the policyholder obtains a loan from a premium finance lender to cover some or all of the premiums.
The lender requires the life insurance policy itself to be assigned as collateral for the loan. Additional collateral like securities, real estate or business interests may also be required, especially in the early policy years before substantial cash value has accumulated.
The policyholder makes regular loan payments to the lender, typically interest-only payments initially. Some may choose to capitalize the interest by adding it to the loan balance.
The goal is for the cash value growth inside the life insurance policy to eventually equal or exceed the compounding loan balance from the premium financing. This allows the policy's values to effectively "repay" the loan over time.
The policyholder can then access the policy's cash value through tax-free loans or withdrawals for supplemental retirement income. Or they can allow the policy to pay out the full tax-free death benefit to their beneficiaries upon their passing.
Two very different ways to fund coverage — and two very different impacts on your balance sheet.
Our enhanced cash value approach provides significant advantages over traditional IUL structures.
The key difference: Standard IUL Year-1 cash value is 10–20% of premium. Enhanced IUL cash value can be 80–95%+, reducing collateral dramatically.
Premium financing is designed for high-income and high-net-worth individuals seeking specific financial goals.
Share a few details and we'll review whether premium financing fits your goals. All conversations are confidential.
No obligation. We'll reach out to schedule a private conversation.