What Is Premium Financing | Pacific Wealth Solutions

Premium Financing

What is premium financing?

Premium financing is the lending of funds to a person or company to cover the cost of an insurance premium.
Insurance premium financing is a well – established, high margin, high growth commercial lending activity.
U.S. financial institutions have entered the industry since year 2000 controlling more than 80% of the whole market.

How it benefits you and your family?

Favorable loan rate and terms

Since the life insurance policy has guaranteed benefits, more stable value than real estate, and enjoy large death benefit claims, the loan rate and interest conditions of the life insurance policy are better than those of the real estate.

Leverage for large policy

Leverage Example: Client deposits $1.65 million U.S. dollars to purchase $5 million U.S. dollars policy.

Positive leverage return yields high return on policy performance

Note: Figures are based on the 15th year policy performance and for reference only. Specific data varies by individuals.

Achieve estate planning goals

Premium financing allows clients realize ten times appreciation of policy value, and at the same time, achieve estate planning goals such as asset inheritance, debt avoidance, tax avoidance, and global asset allocation etc.

Who should consider premium financing?

  • Need insurance for estate-planning, asset protection, wealth accumulation, liquidity at death, or business purposes
  • Wish to keep liquidity and not to use existing capital to pay the premiums
  • Is insurable at standard health rating or better
  • Preferably has minimum net worth of $5M or higher
  • Satisfies the carrier’s underwriting regulations

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