Premium-Financed Life Insurance

Premium-Financed Life Insurance


Structured Insurance Services provides advanced insurance solutions for high net worth individuals, entrepreneurs and small corporate entities (collectively, “Clients”) with needs for large amounts of permanent life insurance, while potentially reducing annual out-of-pocket outlays during the earlier years.

These solutions generally utilize a premium financing structure (“Premium-Financed Life Insurance” or “PFLI”) whereby a permanent insurance policy is melded with a borrowing facility used for funding portions of large premiums and other related expenses.

The result is a projected Death Benefit schedule that meets estate needs or business obligations. The structures are dynamic and require annual monitoring and tuning for future market conditions.

SIS works closely with Clients to complete their PFLI cases from early inception through closing while providing the following services: 

  1. Educate the Client and Its Team. Review of the structural elements of PFLI, including the underlying dynamics between the insurance policy and borrowing facility. In addition, we open a comprehensive dialogue about the risks inherent to PFLI and the means available for mitigation and management of the structure across differing market conditions 
  2. Engage and Collaborate with Client Team – Estate Planners, Accountants, etc to ensure compliance with existing estate plan and goals
  3. Define Elements of the Structure, including selection of the type of permanent insurance, insurance carrier, borrowing facility options, trust structures, collateral needs, etc
  4. Create the Base PFLI Structure to meet a Client’s specific needs. This may include working with a Client’s estate attorney and accountant to establish or modify the estate plan 
  5. Identify and Facilitate the Borrowing Facility best suited for the Client’s specific case, including analysis of terms for bank loans and other lending facilities 
  6. Work Directly with the Carrier to facilitate their internal financial, legal and compliance underwriting requirements and legal review
  7. Work Directly with the Carrier to complete its underwriting process, including negotiating any exceptions, etc. 
  8. Optimize the PFLI Structure based on the selected insurance policy and borrowing facility terms and conditions. This includes a comprehensive analysis of the risks inherent to PFLI and useful metrics for long term policy monitoring and fine-tuning. 
  9. Establish the Structure by closing transactions with all parties through a properly sequenced and actively managed process 
  10. Monitor the PFLI Structure on an annual basis, including reviews of policy and lending facility performance, structural risks and recommendations for fine-tuning