Premium Finance

What Is Premium Financing?

Premium financing utilizes financial leverage (think of financing your house using a bank) to help an individual (or business) afford larger benefit policies without adversely affecting their monthly cash flow.

Why Use Premium Finance

Premium Finance is a financially sound, proven approach used by high income professionals to increase wealth for themselves and their employees.

Finance and Retirement

How Does Premium Financing Work?

Using financial leverage, an individual and bank jointly fund the first 5 years of a 15 year policy. The bank subsequently funds the next 5 years. The remaining 5 years require no funding. At the 15th year, the bank loan is repaid through cash value accumulation in the policy. In the hypothetical example below, day 1 starts with a $1,059,930 Death Benefit. By year 16, the policy would generate $58,000 in retirement income! Financial leverage means you only pay 50 % of the premium for 5 years!  

Hypothetical Example For 55 Year Old Male

Years 1-5

Notice immediate death benefit of over $1million with equal annual contributions by bank and individual.

Protecting Family With Death And Living Benefits

Years 6-10

Protecting Family With Death And Living Benefits

Death benefit grows to $1.3 million, cash value to $345,889 and $0 individual contributions! The bank contributes $67k for the next five years!

Years 11-15

Protection With Retirement Income Growth

The policy is growing during this period with NO further contributions! The death benefit is designed to decrease (still $535k!) while shifting growth to retirement funding of $58k/year at 16th year!

Years 16+

Retirement Income

The policy is now generating income of $58k per year. The total individual contribution was $175k. It only takes three years of income after year 16 to generate $174k!