Turn your clients’ insurance policies into stepping stones for wealth preservation and growth.
Premium financing is a financial strategy where individuals or businesses borrow money to pay for life insurance premiums. This approach is often used for high-net-worth individuals or businesses seeking to leverage their assets and manage cash flow.
Leverage borrowed funds to pay for life insurance premiums, ensuring capital remains accessible for other investment opportunities or financial needs.
Facilitate sophisticated estate planning strategies, enabling efficient wealth transfer to future generations while minimizing estate taxes.
Receive coverage essential for business succession planning to continue running operations without a hitch after an owner’s death.
Structure life insurance policies and loan arrangements to the unique financial goals and circumstances of the families you serve.
Navigating the complexities of PFLI structures demands a keen understanding of the common pitfalls that can undermine their effectiveness.
We help match the stated need with the appropriate insurance contract.
Rather than paying the insurance premiums directly, the policyholder borrows the necessary funds from a lender. The lender could be a bank, financial institution, or a specialized premium financing company.
The insurance policy itself often serves as collateral for the loan. The cash value or death benefit of the policy secures the borrowed funds. The additional collateral needed can be posted and serviced from a portfolio, CD’s, or savings accounts.
The policyholder is responsible for repaying the loan over time, often with interest. Interest rates can vary depending on market conditions and the terms of the financing agreement.
The Wealth Management and Insurance Planning Team, on behalf of the policyholder, needs to monitor the performance of the insurance policy to ensure that the cash value or death benefit remains sufficient to cover the outstanding loan and any accrued interest.
Premium financing can offer several potential benefits, such as allowing individuals or businesses to obtain the desired insurance coverage without immediately using their own capital. The strategy may be used for estate planning, business continuity planning, or other financial planning purposes.
However, it comes with risks, including the need to manage and repay the loan, interest rate fluctuations, and potential impacts on the policy's cash value.
Access to Over 75 insurance carriers
CPS Private Client Solutions (CPS | PCS) is a pioneer in the realm of insurance planning. With a seasoned team of industry veterans, we've honed our craft to provide comprehensive risk management strategies supported by insurance.
