Life Insurance Premium Financing


Life insurance premium financing – With the proper due diligence and structure life insurance premium financing can be an effective and efficient component of an individual s comprehensive financial estate and tax planning strategy. Premium financing is an exclusive life insurance option for people with a net worth exceeding 5 million.

Premium financing is a strategy whereby a qualified borrower accesses third party financing to pay for large life insurance premiums.

Life insurance premium financing – As with other loans the lender charges interest and the borrower the insured in this. Most times when one plans to borrow to pay life insurance premiums an irrevocable life insurance trust or ilit owns the policy. Life insurance premium financing involves taking out a third party loan to pay for a policy s premiums. Life insurance premium financing

In this way premium financing for life insurance is also similar to real estate because it isn t just the equity that is being purchased but also the cash flow and tax advantages that can be realized by properly managing a real estate investment. How premium financing insurance loans work. Once the policy generates enough surplus cash value in later years the owner of. Life insurance premium financing

Premium financing is ideal for those seeking large amounts of life insurance who are in relatively good health as well as have reputable credit. Premium financing is a legitimate way for someone who needs a large amount of life insurance with a big premium to find ways to buy it says ellen siegel principal of ellen r. The insurance companies have constructed specific products for these financed plans to minimize outside collateral and maximize returns. Life insurance premium financing

The are few exceptions to any individual or couple with a net worth under that benchmark. While many individuals will elect the conventional method of paying premiums directly out of current income or assets some will prefer not to disrupt their current investments and cash flow. It is borrowing money from a third party to pay the policy premiums. Life insurance premium financing

Premium financing with an irrevocable life insurance trust separates the value of your life insurance from your estate. Premium financing is an attractive alternative. What is premium financing for life insurance. Life insurance premium financing

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