PREMIUM FINANCING
Who is Premium Financing for? • 1. Minimum Net Worth of $5.0 Million Max Income and/or Max Death Benefit with 2. Income of at least $250,000 a Balanced Approach. Flexible Plan Designs. 3. Qualifies Medically and Financially 4. Client is 75 years old or younger • 5. Able to post collateral to secure deal >2.0 % % of U.S. Households that Qualify Supplemental Retirement Income Planning – Doctors, Dentists, Lawyers, Business Owners Estate Planning – Buy/Sell Agreements – and Key Executives, Professional Athletes / Golden Handcuffs & Key Man Planning. Coaches. Trust Owned Policy – Trustee.
Applications TAX ADVANTAGED INCOME BUY / SELL – KEY PERSON PLAN PREMIUM PORTFOLIO DIVERSIFICATION FINANCING 1031 EXCHANGE ALTERNATIVES STRATEGY ESTATE COST RECOVERY FAMILY BANK
Why Premium Finance? Top Reasons to Finance Life Insurance Premiums LEVERAGE RETAINED CAPITAL Most self-made millionaires are comfortable Many high net worth clients earn double-digit leveraging their assets and have used that to returns on their investments, be it in their create wealth. business, real estate or investments. By paying interest instead of premiums and Utilizing premium finance reduces client structuring ownership of the life insurance outlay in the early years thereby increasing properly, clients can minimize gift & estate long term IRR. taxes. TAX SAVINGS INCREASED IRR 4
Why Premium Finance? Death Benefit Protection Financial Security for family/business Chronic Illness If unable to perform 2 of 6 ADL’s Expected death in less than 24 months Terminal Illness Upside Crediting Potential Interest credited based on market index i.e. S & P No Loss of Cash Value 0% crediting floor Tax Deferred Growth Cash Value can grow tax-deferred Access to tax free loans. Tax-Free Income
Client Process INTRODUCTOR DESIGN MEDICAL DESIGN PLAN & REVIEW LOAN Y MEETING STRATEGY QUALIFICATION FINANCIAL TERMS & SESSION OFFER QUALIFICATION CLOSING Introduction to the Design plan for qualified Submit an application Redesign plan with real Accept lenders loan Exclusive Leveraged person based on desired with a selected insurance numbers based on offer terms. Determine Finance Concept personal and/or business company and have a from Insurance Carrier. outside collateral and applications physical to obtain a Submit plan and financial entity set up. Sign loan medical offer from the info to Lender. Analyze closing package and pay carrier PFS and determine source first interest payment of collateral.
Types of Life Insurance Policies RISK REWARD FIXED UNIVERSAL LIFE POLICY VARIABLE LIFE POLICY › HIGH RISK / LOW › HIGH RISK / HIGH HIGH REWARD REWARD . WHOLE LIFE POLICY INDEXED UNIVERSAL LIFE › LOW RISK / LOW › LOW RISK / HIGH LOW RETURN REWARD
After – Tax Income @ Various Returns 6.5% 6.25 % 6.0% Investments @ Investments @ Investments @ 16 16 14 14 14 12 12 12 10 10 10 8 8 8 6 6 6 4 4 4 2 2 2 0 0 0 Fin Strategy Muni Bonds Fin Strategy Muni Bonds Fin Strategy Muni Bonds Equity Annuity Equities Annuity Equities Annuity 45 Year old Male - After – Tax Income provided based on 45 Year old Male - After – Tax Income provided based 45 Year old Male - After – Tax Income provided based withdrawals beginning in year 20. The after tax income of on withdrawals beginning in year 20. The after tax income on withdrawals beginning in year 20. The after tax $415,605 is withdrawn annually. of $385,802 is withdrawn annually. income of $357,605 is withdrawn annually. ( Interest paid VS. Investing $1.52M.) ( Interest paid VS. Investing $1.52M.) ( Interest paid VS. Investing $1.52M.) 13- Years 13- Years 13- Years . 4
IUL Policy Performance of Leading Carrier Year Avg Retu turn Year Values 6.85% - 25 Year Avg 6.85% 7.29% - 25 Year Avg 7.09% 9% $ 1,672,054 10 Year 7.72% 5 Year - 3.567% 15Year 6.91% + 1.007% 2019 S&P 500 Annual Point to Point 6.29% S&P 500 Annual Point to Point 20Year Historic Average All + 2.012% 2020 Market Value 6.85% In Force Policies 25 Year + 4,031% 2021 POTENTIAL RETURN PERCENTAGE PROBABILITY OF RETURNS 120 100 95. 95.52% 52% 80 The percentage chance of 60 40 obtaining an average return of 20 0 6.0% or greater for a 15 year 5 Year 10 Year 15 Year 20 Year period is as follows: 5.50% 81.5 91.59 100 100 6.00% 75.86 85.7 95.52 100 6.50% 69.84 77.72 79.24 97.8 6
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