Due to economic pressure, “Some Americans Are Being Turned Away Trying to Buy Life Insurance”.
At Tax Efficient Solutions we help guide your clients through the underwriting process and quagmire of carrier new rules and limitations that are coming out faster then people can process.
Premium financing is a technique that utilizes a loan from an independent lender to fund the premiums on a life insurance policy. A properly structured design will significantly reduce the amount of out-of-pocket capital needed to fund the program. The client borrows money at either a low LIBOR (London Interbank Offered Rate) based loan or we can use Swiss Franc LIBOR solution from an independent lender and by utilizing an indexed universal life policy to obtain a crediting rate on funds earned greater than the client’s borrowing rate. The lender holds the policy as collateral until such time as the policy has accumulated enough cash to repay the loan. The bank then releases the collateral and the individual owns the policy free and clear. In order for this to work, the policy must be properly designed so that when the loan is repaid the policy stays in force without additional contributions.
The core of the policy is financing policy premiums through a custom loan tailored to the specific unique circumstances and objectives of the client. In many instances and depending on health, a client can mitigate the tax liability for as little as 10 to 15 cents on a dollar.
Tax Efficient Solutions coordinates all the underwriting and policy design, reviews all legal documents, works closely with the lenders, stages the process, monitors progress and coordinates all communication between the parties. Our relationship with specific lenders and carriers, coupled with decades of experience working with high net worth clients ensures comfort as we move through the process. There’s no “one size fits all” solution: each client requires a unique plan reflecting their unique capital, income, business, tax, estate and charitable objectives.
Contact us today for more information.