Premium Financing

Life Insurance Premium Financing

Life insurance premium financing is a method of funding the purchase of life insurance for those individuals who have significant assets, but do not have or want to use liquid capital to pay the premium on the policy. By borrowing the money to pay the life insurance premiums, the insured frees up capital that can be used more efficiently. The use of premium financing may lower out-of-pocket costs and potential gift taxes.

Who should consider life insurance premium financing?

Life Insurance Premium Financing Diagram
Life insurance premium financing frees up cash flow for the purchase of large life insurance policies.

The best candidates for premium financed life insurance typically have a minimum net worth of $5 million. Collateral for the loan usually consists of personal assets and can be reduced by the cash value in the policy being financed.

What is a typical life insurance premium financing arrangement?

Plan highlights include:

  • Target market: at least $5 million estate and a minimum of $100,000 annual life insurance premium
  • Frees up business or personal investment capital for more efficient usage.
  • Leverages available assets to provide needed insurance coverage with minimal out-of-pocket expenses.
  • Potential to reduce gift taxes.
  • Loan rate typically tied to a published rate like LIBOR, plus a spread.
  • Required collateral can be offset by cash values growing tax-deferred in the policy.
  • Can provide substantially greater internal rate of return on the life insurance policy death benefit over non-financed payment methods.

Contact Us to Learn More About Life Insurance Premium Financing Now!

Provide a 7.2% Guaranteed Rate

Learn how to provide your clients with a 7.2% guaranteed rate using an annuity with an income rider.

» LEARN MORE NOW

Create Wealth With Single Premium Life

Help your clients create and transfer wealth to the next generation while providing a long term care benefit.

» LEARN MORE NOW

Rapid Term Life Underwriting

Get your clients up to $500,000 of term life coverage in a week with no medical or lab work!

» LEARN MORE NOW

The Opportunity Maximizer

Grow your business with Provada's proprietary turnkey marketing solution.

» LEARN MORE NOW

Long Term Care Annuity

Offer your clients a guaranteed annuity along with tax-free long term care benefits.

» LEARN MORE NOW

College Funding

Provide your clients with free, guaranteed scholarships along with a life insurance funded c

» LEARN MORE NOW

Term Quoting

Drive more business through your website, easily and efficiently. Utilize Provada's custom term quoting engine.

» REQUEST INFO NOW

Subscribe to Blog

Enter your email address: