Many of our plans are centered around protecting our futures and our families or businesses with the hope that future generations can enjoy them for a very long time.
Spending the time to plan ahead is paramount.
Make Your Life Insurance Work for You
Any solid legacy includes a life insurance policy. However, funding one of those policies can tie up a lot of capital and make it difficult to expand the other gifts you’re developing for the generation too, gifts such as real estate or trust accounts. At the end of the day, life insurance is primarily designed to protect your loved ones from having to pay all of the taxes and other fees levied on your property as it gets passed on. Depending on how large your estate is, you may need a large amount of life insurance to make the transition easier. How do you finance such a large policy without freezing everything else?
The answer is premium financing.
Premium financing makes it possible for families and businesses to purchase large amounts of life insurance without having to bear the burden of paying the larger premiums out of pocket right away. We carefully design and manage premium financing strategies that protect our clients while providing them with multiple benefits. Premium financing is a specialized service that can be mishandled unless utilized properly. At RSB Life, it’s all we do. We understand the strategy, how to implement and execute it, and we are one of the very few teams who can actually drive true results.
At its most basic, premium financing uses a loan from an established and highly rated bank to fund life insurance premiums. This way, the client reduces the cost of life insurance temporarily to the cost of the interest rate on the loan. This makes for a low initial out-of-pocket commitment. It also prevents a lot of the client’s resources from getting tied up in funding the life insurance policy today, which frees up capital to grow their other investments for tomorrow. Better said, the loan provides a tax-preferred supplemental income stream, which means the client enjoys the following benefits:
- Preferred treatment on all subsequent withdraws
- Tax-deferred growth
- Federal income, and tax-free debt benefits
As you can see, premium financing may be a bit unorthodox for those only familiar with run-of-the-mill strategies, but it offers incredible advantages that can radically shift your financial future.