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How To Get Carrier Approved Life Insurance Premium Financing
By Boaz Arbel
Lots of high net worth senior citizens find the need to purchase a high face value life policy to protect their family or for the purpose of estate planning. Individuals who in possession of major assets who does not wish to liquidate their properties and investments to pay expensive life premiums have the opportunity of having their premiums financed through a Carrier Approved Life Premium Finance Program. By having a major bank pay the life premiums, the insured frees up his assets to be used more proficiently in other places. With no (or very little) out of pocket expenses, personal guarantees and minimum financial risk a qualifying person can give millions to his family or Alma matter in the form of a death benefit. Using Carrier Approved Life Premium Finance Program also lowers out of pocket expenses and potential gift taxes.

Lots of senior citizen utilized the option of finance a new life policy as part of their estate planning. Through lending funds to make premium payments, insured may have the capacity to acquire new policy without reducing cash assets or savings while getting their full insurability which includes illiquid assets such as real estate.


Life Premium Finance Qualification

· 70 years of age or older (Male and Female)

· Above average health condition

· Minimum net worth of $5,000,000

Premium Finance Programs Available

Recourse premium financing is now the most accepted type of carrier approved premium financing program. The main distinction between partial and non-recourse is an additional collateral requirement on top of the policy that must be posted by the insured. On top of the policy, an additional collateral amount of 25% to 100% of the current outstanding loan value in the form of personal guarantee or letter of credit is required by the premium finance company. Carrier approved program that the companies have reviewed the programs and have generally approved the premium

finance companies program structure and agree to issue policies under the program. The programs come with a variety of loan terms of 2, 3, 5, 7 and 10 years in addition to a lifetime loans. The rates may vary but are generally variable or fixed and tend to be lower than the non recourse loan offered by some investors and 3rd parties. Partial-recourse programs are usually available to insured's over the age of 70 with at least a $5,000,000 in net worth.

Reasons for applying to the Carrier approved Premium finance program

No need to execute high performing investments.

Maintain cash on hand.

Maintain current cash flow.

Part of an estate tax plan.

Provide a legacy benefit.

Full utilization of your insurability

The process

Submission of informal application and HIPAA to release medical information. All information is being gathered and submitted to companies who rate the proposed insured for eligibility for coverage. Once proposed insured has been approved by the company, premium finance companies will offer loans to finance the premium and the policy will be issued into an irrevocable life trust, or ILIT. Policy owner will name beneficiaries of the life policy which may be a, children, spouse, business partners or charity

After that initial loan amount is dispersed to the ILIT which pays the premium on the life policy. As future premium payments to the company are required, Lender Company continues to pay funds according to the premium time table.

Once the loan get to its maturity the borrower may have a number of options including the continuing to finance the premiums by themselves, repaying the loan plus interest and keeping the life policy or selling the policy in the secondary market for life using the life settlement method. If the insured passes away during the finance period the beneficiaries will get all proceeds and will pay back the loan and keep the rest.
Boaz Arbel is the general manager of Arbel Life , LLC a New York based company that specialized in the high net worth senior market. To get more information about Life insurance Premium Finance, Life Settlement and to read more articles about the subject please visit Arbel Life, LLC web site at www.arbellife.com

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