Financing Solutions for Insurance Strategies
Safeguarding your assets and ensuring the smooth transfer of your wealth to your beneficiaries requires a carefully crafted estate plan.
For those who have achieved financial success, nothing may be as important as leaving a lasting legacy for family members, a favorite charity or a foundation. Safeguarding your assets and ensuring the smooth transfer of your wealth to your beneficiaries requires a carefully crafted estate plan – one that usually includes life insurance. Life insurance can play a key role in meeting estate tax obligations, thus allowing for family assets to remain with your heirs vs. being liquidated to satisfy the cash needs of your estate.
That all sounds good, but the outlay necessary to fund policy premiums may be disruptive to your financial strategy by requiring the sale of financial assets. Such a sale could trigger higher taxes or take funds out of higher-yielding investments. Premium Financing from BOK Financial Private Wealth can provide the opportunity to acquire needed insurance while avoiding these issues.
We can finance the majority of your initial and subsequent premium payments by using the cash surrender value of the policy to secure a loan. Many clients choose to finance the entire premium by providing additional investment assets as collateral, thus eliminating the need for any cash outlay when the policy is acquired. We can also give you additional availability to fund future premiums as required by the policy. We typically provide a five year term with quarterly interest-only payments, and extending the loan at maturity is also an option if it continues to provide value to your financial plan.
The current low interest rate environment makes this structure even more appealing, with borrowing rates significantly below the guaranteed rates of return available from most insurance companies.
If you are in the market for a new policy, or would like to leverage an existing policy as part of your investment strategy, please give us a call so we can answer any questions you might have about Premium Financing with BOK Financial Private Wealth.