Premium financial services for clients to keep their balance sheets intact.
How do you solve a $125 million estate tax problem when you are “land rich and cash poor”?
For high-net-worth families, the looming threat of estate taxes can be overwhelming—sometimes even forcing heirs to sell family businesses or real estate just to pay the IRS. In this video, we explore the power of Premium Finance (also known as leveraged insurance), a sophisticated financial tool that allows you to procure necessary life insurance while keeping your balance sheet intact.
What is Premium Finance?
Simply put, it is the use of bank leverage to pay for high-value life insurance premiums. This allows the client to solve for estate taxes, enhance philanthropy, or fund corporate needs (like Buy-Sell agreements or “Golden Handcuffs”) without a massive out-of-pocket cash outlay.
The Advantage of a $4 Billion Portfolio
In the world of Premium Finance, the interest rate is everything. Because of our 30-year history and over $3–$4 billion in loans across our primary banks, we are able to capture unique interest rates and terms that smaller groups simply cannot access.
Case Study: The $125M Estate Tax Solve
We walk through a real-world example of a large agricultural family facing a $125 million estate tax liability.
- The Problem: The family had plenty of land but lacked the liquidity to cover the tax, causing immense stress for the heirs.
- The Solution: We implemented a financed insurance plan where a bank paid the premiums.
- The Result: The family secured $125 million in coverage using a standby letter of credit (SBLC) against their real estate as collateral—protecting the farm for the next generation without a major cash drain.
Who is the Ideal Client?
Premium Finance is a specialized tool for a specific demographic:
- Age: 45 to 65 years old.
- Insurability: Must be in good health.
- Net Worth: Minimum of $10 million or more.
