Advantages and Disadvantages 2


1. For ultra wealthy individuals, life insurance has always been the preferred estate tax funding vehicle. A properly structured program preserves wealth, pays taxes with someone else’s money, generates no additional income or estate tax obligation and has no government reporting.

2. Life Insurance provides liquidity needed for families to pay taxes and final expenses and transfer assets to future generations.

3. Life Insurance leverages premium dollars by using financed dollars to pay the costs of owning the policy.

4. When structured correctly, life insurance proceeds are generally protected from creditors.

  • Assures a certain amount of cash will immediately be created upon death of the insured;
  • Income tax free proceeds are delivered to the trust or beneficiary;
  • Financing the premium payments with a low cost bank financed loan allows for a larger death benefit that otherwise available;
  • Entire arrangement avoids probate and governmental oversight.


1. Individual must be healthy enough to be underwritten by an A+ rated life carrier;

2. Life insurance is not a deposit of any bank and not guaranteed by FDIC or any Federal Government Agency;

3. Failure to repay the loan as illustrated or invasion of cash values for other purposes may cause the policy to fail.