Almost everyone needs life insurance protection, especially those with large assets, such as small business owners or high net-worth individuals. That’s because life insurance provides diverse financial coverage that can pay off your estate taxes, permit your business to function properly, allow your family to live comfortably following your death, fund your charitable donations, and take care of other important considerations.

Of course, the more you have to protect, the more insurance coverage you need – and the higher your premiums. But, how can you pay these premiums without depleting your cash reserve, interrupting your cash flow, or liquidating your assets?

Premier Financing
  • Reduce current out-of-pocket cost for life insurance coverage
  • Minimal or no impact on current investments
  • Potentially favorable gift tax consequences
  • Provide liquidity in a large illiquid estate
  • Deferring or avoiding capital gains taxes payable from liquidating appreciated assets

What is Premium Financing?

Premium financing is an innovative, cost-effective tool that pays your insurance premiums for you – without interfering with your personal or business assets.

Instead of making your premium payments, you obtain a loan from a financial institution, which then pays your premiums directly to your insurance company. Usually, your real estate holdings or market investments – or even the insurance policy itself – can be used as collateral. You only need to pay the interest on the loan, and in some cases, even that isn’t necessary.

If you should pass away while the loan is active, the loan and interest payments simply are subtracted from the death benefit of the policy; the rest goes to your named beneficiaries on a tax-free basis.

With premium financing, you’ll experience little or no out-of-pocket expenses, and absolutely no hidden fees or costs. And, you have the option of paying off the loan at any time.

Using Premium Financing to Your Advantage

Premium financing allows you to put your money and assets to work for you, instead of tying them up in your insurance payments. This enables your holdings to increase in value, generate more income, and maximize their profit potential. Why sell off a valuable property or investment before you’re ready to do so?

With premium financing, your cash stream flows uninterrupted, which permits your business to operate smoothly, and lets you maintain your current lifestyle without making sacrifices.

Additionally, premium financing frees you from the worry of trying to sell illiquid assets, and the tax consequences of unloading your holdings.

And, you can use premium financing to leverage your holdings and purchase larger amounts of insurance to protect your business, estate, and family.

How the process works

How It Works
  1. ILIT applies for the loan
  2. Bank issues financing for policy
  3. Policy issued to Trust
  4. Insured pays interest on financed loan
  5. Premium paid to insurer
  6. Policy pledged as collateral
  7. Letter of Credit from the insured
  8. Policy proceeds are used to payback the remaining loan balance and the beneficiaries receive the balance
  9. Where to Obtain Premium Financing

    While premium financing is an excellent option for many, it should only be handled by a financial services firm that’s skilled in this area. Why? Because to derive the most from this approach, both the policy and the collateral must be structured properly, and the right source used for funding.

    Emerging Insurance Brokerage Services has the expertise needed in premium financing to ensure the optimal results for you – as well as relationships with some of the strongest financial institutions in the world. So, you can be assured your plan will be in secure, experienced hands.

    Contact us today at (510) 811-8960 for a free consultation, and see if premium financing is a viable solution to your insurance and financial needs?

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Contact Us

Noori Insurance Agency, Inc.
DBA: Emerging Insurance Brokerage Services

37371 Fremont Blvd Ste B.
Fremont CA 94536

tel 510-796-4929
fax 510-796-4928