It is well documented that specially engineered life insurance such as equity-linked products, when built and implemented properly, can add significant value to a client’s portfolio. The use of third-party financing, also known as premium financing, can even further enhance results, but must be meticulously crafted.
Third-party financing is most often used when interest rates can be reasonably predicted to be lower than crediting rates achieved inside the life insurance container. For example, an Indexed Universal Life (IUL) policy provides long-term, equity-based returns without risk of losses during market declines, while providing complete tax-efficiency during both accumulation and distribution. When third-party financing is then added to the mix, the results can be incomparable.
It’s important to note that this strategy (premium financing) should only be used by those high net worth or high income individuals or families who could otherwise afford to pay the underlying premium on the policy, but choose to finance the premiums to maximize rates of returns.
Myerson Wealth has extensive experience and knowledge with the most appropriate issuing carriers and financing partners, which can enhance (or ruin) the ultimate leverage from a premium financed strategy.