Premium financing is a current marketing concept that is being used by many wealthy individuals requiring considerable life insurance coverage for Estate Planning. Premium financing is a method that funds the purchase of life insurance for an individual who has significant assets, however, either does not have, or does not wish to use liquid capital to pay the premium on a life insurance policy. The individual borrows money to pay the life insurance premiums, and since he has more available capital, as he is not paying the life insurance premiums, he frees up business or personal investment capital that can now be used more effectively for other uses.

Commonly, prospects for premium financing represent a minimum net worth of at least $2,000,000. Premium financing programs are jointly developed between lenders providing the financing and insurance carriers providing the coverage. At the time of death, a portion of the death benefit is used to pay off the loan to the lender. The loan can be paid off earlier if desired.

Premium financing has many benefits. The use of financing for premium payment lowers out-of-pocket costs and potential gift taxes, thus freeing up business or personal investment capital so that it can be put to more efficient use. In addition, premium financing can provide a substantially greater internal rate of return on life insurance policy death benefit paid over non-financed methods.

How Premium Financing Works
 
The premium finance concept is simple your client borrows money to pay life insurance premiums. The actual transaction itself can be quite complex. For that reason it is crucial to involve legal and tax advisors in the process.
 
While each premium finance transaction is unique, every transaction consists of two separate financial instruments; a permanent cash value life insurance policy, and a loan. The process occurs in two steps;

   1. The Life Insurance Policy

      The initial life insurance application process is similar to any other life insurance application. The life insurance company will complete medical and financial underwriting to determine if your client qualifies for coverage.


   2. The Loan Application

      After the policy is approved, a loan application is submitted to the lender for approval. The lender will review your client's credit and financial status and decide whether or not to make the premium loans.
Metropolitan Advisory Group Inc. (“MAG”) helps insurance brokers, financial advisors and wealthy individuals maximize the full potential of new opportunities that now exist in the insurance marketplace.  MAG’s strategies can allow an advisor to dramatically boost their own income while providing their clients with more valuable advice and cutting edge financial products.

Your clients may not be aware that they can qualify for more life insurance if they have not already purchased the maximum amount available to them based on their net worth and excess insurability. MAG provides eligible seniors with alternative financing solutions.

MAG’s unique product offerings help high net worth individuals preserve their wealth for generations to come. By providing multiple strategies and an estate planning tools, MAG is able to suit the high net worth individuals’ potential needs.

We can also help to facilitate any transactions pertaining to:

-In-force Life Insurance Premium Financing

-Life Settlements

-Loans against existing life insurance policies 

Premium Financing For New Insurance Policy

     Private Money Programs

     Investment Bank Programs

     Traditional Bank Financing Programs

The primary candidates for our programs are the high net worth individuals whom fall into the age bracket of 50 to 85 with a minimum net worth of $2MM.

Being able to offer multiple premium finance loan programs enables MAG to offer the most beneficial products to the client.

Using our broad network of global investors and partners, we can customize financial solutions for insurance industry professionals and their clients. We have the capabilities to design new products that will meet your needs.

MAG wide array relationships allow us to provide agents with the TOP Compensation, Full transparency and Innovative Finance programs.
 
We look forward to working with you and establishing a mutually beneficial business relationship.


Jon Mittman
Senior Vice President
Metropolitan Advisory Group Inc.

212-332-7596
Jmittman@metropolitanag.com
 

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