With premium financed life insurance, you can purchase a large life insurance plan while simultaneously lowering or even eliminating your out-of-pocket premium costs.
This strategy involves taking out a third-party loan that you then use to pay the insurance policy premiums. That way, you can afford a larger insurance policy without needing to liquidate assets or pay more money out of pocket. Keep in mind with premium financing you always want to look at an exit strategy.
If you’re interested in exploring premium financing, Goheen Companies is an experienced, trusted partner. Our team currently manages over $1 billion in premium financed life insurance, so you can have the peace of mind that comes with knowing your future is in expert hands. We’re also dedicated to creating custom solutions that fit each individual’s unique needs and will lead to long-term financial success.
To help you get started, here’s a guide to a few of our most frequently asked questions.
Who is a Good Candidate for Premium Financed Life Insurance?
Premium financing is an effective strategy for many high net worth individuals, specifically those with a net worth of over $5 million dollars in assets or investments.
Additionally, candidates must earn a high enough annual income to qualify for the bank loan.
What Advantages Does Premium Financing Offer?
First and foremost, premium financing allows you to pay for life insurance without disrupting your cash flow. But this strategy also offers a couple of other key advantages:
Protect Future Income: Money that you put into a life insurance plan grows tax deferred, and unlike a 401k, you don’t have to pay taxes when you withdraw it. By purchasing a larger life insurance plan with premium financing, you can create tax-free retirement income for your future self. Be advised however, if you surrender a premium finance policy you could have a tax liability.
This strategy also allows you to significantly minimize gift and estate taxes.
Higher Return on Investments: Rather than liquidating assets to pay your insurance premiums, you can keep your money invested in high-returning assets and use your loan to pay for premiums. In most cases securities, cds, cash, letter of credit, bonds or money markets are used as collateral.
Premium financing also does not go on your credit report which allows you to continue your borrowing power with other endeavors.
How Does Goheen Companies Approach Premium Financing?
When you work with our knowledgeable team, we’re committed to serving as your partner for the long-term. To make that possible, we handle all the details and set up a custom loan that will fit your unique goals and needs.
When you first start working with us, we will use our proprietary template to give you detailed banking and insurance illustrations that show the impact of financing on your premium payments, interest payments, and estimated loan payoff.
From there, we handle the tedious details for you, like requesting the attending physician statements, gathering forms, doctor reports, and scheduling medical exams. We keep you up-to-date on the process so you can feel confident it’s being taken care of without worry.
We work with you and your advisors to determine if a trust, an LLC, FLP, or life insurance limited partnership structure is best for you and your family or business .
We have 15 plus banks we work with to help put you with the right bank that fits your particular situation and banking needs. If desired, we can also work with your current bank if they have a premium financing arm available.
Partner with Goheen Companies to Find a Solution that Works for You!
Even if you already own life insurance, or premium financing does not fit your particular situation, we can review your current policy to discuss whether or not it’s the best option for your long-term needs and design a life insurance strategy that fits your desired planning.
Often, we are able to help clients lower their premium payments, increase their death benefit and overall portfolio performance, and improve their cash flow.
Contact us today to schedule a consultation!