Premium Financing

Whether a high-net-worth individual desires an additional tax-free income stream in future years or desiring significant death benefit to pass to their heirs, financing life insurance premiums should enable you to earn a spread between expected policy returns and the borrowing rates, potentially resulting in a compounding 8-10% tax-free return over time.



Ideal for those who desire a substantial amount of life insurance, for business planning, tax planning or to transfer wealth to future generations, and who don’t want to write significant premium checks.

HNWI finance premiums for various reasons; it could be for lack of liquidity, or they simply would rather use the bank’s money and pay interest at a low rate to provide beneficiaries with death benefit in the future.


Building up cash in the policy is an effective way to grow leveraged dollars in a tax-free environment. The cash value in the policy can be accessed, via tax-free distributions, during your lifetime.

You may also opt to allow the cash to continue growing over time in the tax-free environment.

Why Premium Financing?

Top Reasons To Finance Life Insurance Premiums

  1. LEVERAGE – Most self-made millionaires are comfortable leveraging their assets and have used that to create wealth. Allows for HNW to obtain needed coverage without liquidating other assets. The main benefit in premium financing is the avoiding the opportunity cost in paying out of pocket. By using other people's money (leveraging a lender's capital), HNW can retain a significant amount of capital known as retained capital.
  2. TAX SAVINGS – By paying interest instead of premiums and structuring ownership of the life insurance properly, HNW can minimize gift and estate taxes. Premium financing can help HNW use more of their annual gifting exclusions rather than tapping prematurely into lifetime exemptions.
  3. RETAINED CAPITAL – Many high net worth HNW earn double-digit returns on their investments, be it in their business, real estate or investments. Premium finance allows those HNW to keep their money working for them in those high returning asset classes.
  4. INCREASED IRR – Utilizing premium finance reduces client outlay in the early years thereby increasing long term IRR.

Did you know Life insurance is a major investment?

Life insurance is usually a significant investment for HNWIs. Therefore, it is appropriate for them to consider the best means of managing that investment, along with other potential investment opportunities, and consider leveraging to pay their insurance premiums.

Our firm is not permitted to offer, and no statement contained herein shall constitute, tax or legal advice.
You should consult a legal or tax professional on any such matters.