What Is Life Insurance Premium Financing?
Life insurance premium financing is a strategy under which a life insurance client can purchase their life insurance with a loan. The loan is equivalent to the amount of money they surrender. Wealthy individuals who qualify can thus purchase large life insurance policies without tapping into any of their personal cash flow or business funds. These individuals can then retain capital for other investments that they believe will outperform the cost of the third-party financing.
Prospects for these strategies include privately held business owners, corporate executives, hedge fund managers, private equity executives, real estate owners, entrepreneurs, and successful physicians. They all work with specialized life insurance advisors in conjunction with insurance carriers that have developed products tailored to the strategy.
Life Insurance Trust Company
Life Insurance Trust Company is the perfect company to work with. An affiliate company of ITM and owned by our parent company Longevity Holdings, the firm focuses exclusively on life insurance, with no eye toward acquiring other assets. By utilizing the services of ITM, LITCO provides expert trust administrators and life insurance specialists that work daily with tens of thousands of policies. Because this work is the main day-to-day function of the companies, they are able to provide the highest level of service to their clients. Until now, there has not been a trust company that specializes in life insurance, including premium financed policies. Life Insurance Trust Company was founded with this in mind and to help provide this specialized service to trustees. Though the trust company does not provide any financing themselves, they do provide the premium financing market with a logical option for housing premium financed policies.
The Advantages Of South Dakota
South Dakota has long been a superior trust situs. It is annually ranked as one of the best places to house a trust in the US by leading trust and estate planning publications. South Dakota has the lowest insurance premium tax of any state – 8 basis points. It prides itself on client confidentiality and does not require trust documents to be filed publicly. The legislators are cooperative and proactive toward trusts and have levied no state income taxes on trust assets, and state legal statutes allow for the trust creators to direct the trust company to follow the investment decisions of an outside advisor, making the life insurance professional part of the process.
The staff at Life Insurance Trust Company knows the trust business and understands the life insurance business. It is extremely advisor friendly and will work with you to ensure that your clients and their beneficiaries maximize the value of the policy in their trust.
Premium financing is a specialized strategy, make sure you partner with a specialized company skilled in the management of life insurance as an asset class. To learn more about the advantages of LITCO, visit their website.