To determine if premium financing could be a cost-efficient solution for you it's best to understand how it works. Let's look at the following example:
James has accumulated significant wealth after working for years to build his business. His net worth now tops $10 million and with the help of his financial team he has determined the need for $6 million in life insurance coverage. While he can more than afford the premiums he would rather continue to drive his free cash flows back into his business. His financial team recommends that he consider financing his life insurance premiums to minimize the impact on his cash flows - using loans at competitive interest rates to pay the premiums.
Individuals, businesses, or trusts in need of substantial permanent life insurance coverage with a net worth exceeding $5 million and a minimum of $500,000 in annual income may find economic value in financing premiums. Typically, people elect financing because they either have cash flows devoted to other profitable endeavors or well-performing assets that they do not wish to disturb. In either case, financing affords them the opportunity to not disrupt their current finances while they take action on planning for the future.
If you answered “yes” to all three questions, then financing your life insurance premiums might be a good fit. Talk to a member of our team today to see if financing would be a useful addition to your plan.
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Securities and investment advisory services offered through registered representatives of MML Investors Services, LLC, Member SIPC. Taylor Financial is not a subsidiary or affiliate of MML Investors Services, LLC, or its affiliated companies. OSJ 4830 W. Kennedy Blvd., Suite 800 Tampa, FL 33609, (813) 286-2280.
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