Advanced Strategies

Premium financing,
engineered for efficiency.

An innovative life-insurance strategy for high-net-worth clients and their advisors: preserve liquidity, optimize capital, and strengthen wealth transfer.

Start the conversation

Premium financing uses third-party capital to fund life-insurance premiums, keeping your own capital invested while supporting long-term estate and wealth-transfer objectives.

Premium Financing

Who it is for.

This strategy is exclusively designed for high-net-worth individuals and business owners who have a clear insurance need but prefer not to liquidate high-performing assets to pay premiums.

Net worth generally $10M or more.*
A need for life insurance.
Insurable at favorable rates.
A sophisticated investor who understands leverage.
Adequate assets to pledge as collateral (cash, CDs, marketable securities, letter of credit, existing cash-value in active policies).
‍

^{*Net worth can be in the form of liquid assets, real estate, business valuation, etc.}

TWO STRUCTURES

How it works

Traditional

You pay the premium, the carrier holds the policy, and the benefit goes to your beneficiaries at death.

Financed

A third-party lender pays the premium on your behalf. In return, you pay interest, and your policy and other assets serve as collateral.

EXIT STRATEGY

How it resolves

Low-rate scenario

When the policy's dividend or interest rate is outperforming the loan rate, there's often no rush to repay. Cash value continues to accumulate while interest on the loan continues to accrue, letting the spread work in your favor.

High-rate scenario

When rates shift and repayment becomes the better move, you can pay with cash value, supplemental assets, or a mix of both.

At death

Should the insured pass away before the loan is repaid, the death benefit covers the outstanding balance, with any remainder passing to the beneficiaries as intended.

the trade-offs

Why borrow?

Potential benefits

Potential downsides

Lower opportunity cost than liquidating assets.
Minimal impact on existing assets.
Reduced out-of-pocket outlay.
Access to competitive borrowing rates.
Efficiency measured by internal rate of return (IRR) on the death benefit.

Collateral calls if pledged asset values drop.
Interest rate risk.
Added long-term cost of borrowing.

THE MECHANICS

Analyzing the transaction.

Typically owned by an Irrevocable Life Insurance Trust (ILIT) to keep the death benefit outside the taxable estate.

Leverages the lifetime exemption limit (2026: about $15M per person, $30M per couple, indexed).

Annual loan advances match the scheduled insurance premiums, reducing out-of-pocket costs.

Usually based on SOFR plus a spread, with interest paid annually or accrued.

Paid at death from the policy's death benefit, from accumulated policy cash values, or a combination of all 3.

Transactions ARE 100% collateralized using the policy’s cash value plus supplemental outside assets.

THE PROCESS

Getting started.

Design

Analyzing needs and modeling structure.

Coordinate

Aligning with your legal and tax team.

Apply

Securing insurance capacity.

Underwrite & Finance

Finalizing loan terms and approvals.

Execute & Maintain

Funding and ongoing administration.

For advisors & family offices

Expand your firm's capabilities.

Partner with a premium-financing specialist team for your high-net-worth clients. We provide the expertise, modeling, and execution so you can focus on the relationship.

Partner with us