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.

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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 $5M or more.
A genuine need for substantial life insurance.
Insurable at favorable rates.
A sophisticated investor who understands leverage and the need for an exit strategy.
Adequate assets to pledge as collateral (cash, CDs, marketable securities, letter of credit, high cash-value policies).

How it works

Traditional

Financed at inception

Exit strategy

Traditional

_{Benefit goes to beneficiaries at death.}

Financed at inception

_{Policy and external assets serve as collateral.}

Exit strategy

_{Net death benefit to beneficiaries.}

the trade-offs

Why borrow?

Potential benefits

Potential downsides

Lower opportunity cost than liquidating assets.
Minimal portfolio or real-estate impact.
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 affecting ongoing costs.
Added long-term cost of borrowing.
A larger initial death benefit may be needed to net out the repayment amount.

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 or Prime plus a spread, with interest paid annually or accrued.

Paid at death from the policy's death benefit, from accumulated policy cash values, or out of pocket.

Transactions are typically 100% collateralized using the policy's cash value plus outside assets.

THE PROCESS

Getting started.

Month 1

Design
Analyzing needs and modeling structure.

Month 2

Coordinate
Aligning with your legal and tax team.

Month 3

Apply
Securing insurance capacity.

Month 4

Underwrite & Finance
Finalizing loan terms and approvals.

Month 5

Execute & Maintain
Funding and ongoing administration.

FOR ADVISORS

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