Premium financing allows high-net-worth individuals/business owners to obtain permanent life insurance by borrowing the premiums from a lender. The loan is secured by the insurance policy and/or other assets¹.

Premium life insurance policies are designed specifically for high-net-worth individuals, offering higher coverage limits and more flexible investment options. These policies can also include additional features tailored to the estate planning and wealth preservation needs of affluent clients.

Benefits include:

•Asset Protection: Safeguard your wealth against legal and financial liabilities.

•Estate Planning: Efficiently manage and distribute your estate with reduced tax liabilities.

•Wealth Accumulation: Policies participate in market upside in the good years while having a floor of 0 in market down years.

•Business Continuity: Ensure smooth business succession, cover potential buy-sell agreements, key-man policies and/or to create a executive benefit (i.e. Golden Handcuffs)

•Capital Continuity: By borrowing the premium the client is able to put their money to work in the areas that have helped make them successful.

The risks include carrier risk (insurance company failing), renewal risk (not being able to find a bank to loan the premiums), and collateral risk (client not being able to cover collateral until policies outpaces loan).

Premium financed life insurance can serve as a cornerstone in a diversified financial strategy, providing an immediate death benefit that covers your family in the event of your untimely death. PFLI also provides a vehicle for wealth accumulation that can be used in the form of tax free loans/distributions.

As of today, clients need a net worth of $5 million or more to get approval from the bank.

IUL (Indexed Universal Life). There are hundreds of IULs on the market, Athelgacy works with a very select few that meet our requirements when it comes to the fee structure and the interest barring engine.

Typically, if using a non-liquid asset for collateral there will be a cost to convert it to what the bank will consider a liquid asset. That is usually between 1-3% annually. Collateral solutions can always be changed to meet the needs of you or the company at any time. We can switch from cash to letter of credit, or we could use both if needed.

PFLI may not be widely known because it's a specialized strategy best suited for high-net-worth individuals who can leverage their assets effectively¹. Furthermore, the barriers to entry used to be $50 million or more. In recent years companies like our partners Cool Springs have helped make it more accessible.