At RSB Life, we remain dedicated to doing our utmost to make sure that our clients understand the entire premium financing process, from start to finish. It is our responsibility to give you access to all the information surrounding your legacy planning and include the options should the unforeseen take place.
It’s important to see the big picture.
Life can present you with some unexpected twists and turns. So while you hope that you’ll be able to see a premium financing strategy through to the end, things may change down the road. We’re here to reassure you that change is something we can anticipate, and we’re prepared to adjust your plan so you still get the maximum benefits no matter what happens in life.
From the underwriting process to the completion of paying off your loan or choosing another exit path, RSB Life will stand strong as your ally throughout. We pour time and energy into our clients’ strategies to make sure we’re staying on course as the years go by. We know how easy it can be to take one’s eyes off the prize, and we’re here to make sure your goals stay front-and-centre even if you have to exit the strategy early. If you find yourself needing to change plans, rest assured that we will continue to stay close every step of the way.
Here are the four main ways that you can exit your life insurance premium financing strategy if necessary.
Strategy 1 – Policy Death Benefit
We use this strategy when a client passes away. If a client passes before the loan is satisfied, the life insurance benefit will pay the loan out first. The remaining balance will be paid out to the trust and get distributed in whatever way the client predetermined, typically to family and other loved ones or a charity of choice.
The following three strategies can be combined in any way that works best for you.
Strategy 2 – Policy Values
In this strategy, we use the cash value that has accumulated in the life insurance policy to satisfy the loan. The policy is then left to run traditionally for the rest of the client’s life while we monitor it, running in-force analyses each year so that changes are made to adjust variation.
Strategy 3 – Side Fund
In this strategy, we set up a side fund like an investment account or real estate fund that will accumulate money at a specific interest rate. We plan things out so that, by year 10 or 11 the side fund has grown enough to completely satisfy the outstanding loan.
Strategy 4 – Continuation
In this strategy, we keep the loan active as well as the policy values and focus our energy on maintaining a good arbitrage between the two so that you can keep the loan active, enjoy the protection of the policy and grow your cash value within it.
