leveraged estate preservation plan · federal estate taxes can be a huge burden and unexpected...
TRANSCRIPT
Prepared for: Sample Client
Prepared by: Sample Advisor
Leveraged Estate Preservation PlanAn efficient life insurance funding strategy to plan for estate taxes and leave a legacy
Prepared for: Sample Client
Prepared by: Sample Advisor
TABLE OF CONTENTS
3
16
14
12
10
6
5
4
Introduction
Estate Tax Liability
Premium Financing
Report Summary
8 Life Insurance Options
Recommended Option
Policy Stress Test
Next Steps
Assumptions & Disclosures
Sample AgentPremium Finance Advisor
Tel: (888)543-3776
https://www.google.com
Meet My Back Office
Introduction
Helping you protect and secure your legacy while
creating an enduring impact for future generations.
If you are like many of my clients, you have achieved considerable wealth
and assets over your lifetime and are looking to preserve or pass your
estate to those who matter most.
Life insurance as the center for a sound estate plan can help provide you
with the protection you need to secure your legacy while creating an
enduring impact for future generations.
However, your high net worth may require you to obtain a significant
level of life insurance which could force you to liquidate your assets to
pay the high premiums. That’s where my team and I can help you.
We specialize in assisting wealthy individuals and families obtain the level
of protection they need with a smaller impact on their assets through an
exclusive leveraging strategy called premium financing.
With sufficient collateral, premium financing can be an effective estate
planning tool which can help you pay for the life insurance you need
today while financially protecting your heirs in the future.
Advanced Designers
Designs conservative premium
financing strategies built for
longevity and efficiency.
Business Support
Researches and trains staff
on the latest life insurance
strategies and products.
Account Management
Oversees all account activity
within premium financed life
insurance policies.
Operations
Assists with back-office needs
and helps with overall business
processes and activities.
Year Age Total Estate
Value
Unified
Credit*
Federal Estate
Tax Exposure
Federal
Estate Tax
2020 57 $41,200,000 $23,160,000 $18,040,000 $7,216,000
2021 58 $42,436,000 $23,507,400 $18,928,600 $7,571,440
2022 59 $43,709,080 $23,860,011 $19,849,069 $7,939,628
2023 60 $45,020,352 $24,217,911 $20,802,441 $8,320,976
2024 61 $46,370,963 $24,581,180 $21,789,783 $8,715,913
2025 62 $47,762,092 $24,949,898 $22,812,194 $9,124,878
2026 63 $49,194,955 $12,620,000 $36,574,955 $14,629,982
2027 64 $50,670,803 $12,809,300 $37,861,503 $15,144,601
2028 65 $52,190,927 $13,001,440 $39,189,488 $15,675,795
2029 66 $53,756,655 $13,196,461 $40,560,194 $16,224,078
2039 76 $72,244,449 $15,315,032 $56,929,418 $22,771,767
2049 86 $97,090,499 $17,773,720 $79,316,779 $31,726,712
2059 96 $130,481,512 $20,627,127 $109,854,384 $43,941,754
Tax Cuts and Jobs Act (TCJA) Sunsets
Assumptions used for above estimates:
Estate Tax Liability
Current Estate Value: $40,000,000
Tax Rate: 40.0% - Expected Annual Estate Growth: 3.0%
⚠For people with a net worth of $10 million plus, on average, more than 50% of their net worth is not liquid
Source: Federal Reserve Survey of Consumer Finances
* In these estimates, the cost of living adjustment increases the Unified
Credit each year. At the current time, in 2026 the Tax Cuts and Jobs Act
(TCJA) sunsets and the value will decrease. Each year after that we have
increasing at that same assumed cost of living adjustment.
Annual Estimated Cost of Living Adjustment and Inflation: 1.5%
Estimated Federal Estate Taxes Due (1)The Future Impact of Estate Taxes
Federal estate taxes can be a huge burden and unexpected
expense for your beneficiaries - unless it’s properly planned
for.
For many high net worth individuals, a large concentration of
their wealth tends to be tied up in relatively illiquid assets such
as businesses, closely held stock, real estate, art, etc.
Faced with such a large federal estate tax bill, beneficiaries
may be forced to sell assets at a large discount to pay the
taxes if they are not provided with an ample amount of
liquidity (see stat below).
While your current federal estate tax bill may - or may not -
be high, it could be a sizeable amount in the near future.
The table to the right illustrates the amount of federal estate
taxes one may owe in this fiscal year, in 2026 and beyond. The
reason for such a large tax increase is because the unified
credit will fall off a fiscal cliff on January 1, 2026 due to the
expiration of the Tax Cuts and Jobs Act (TCJA). The unified
credit is the amount of assets thats allowed to be gifted to
other parties without having to pay federal gift tax or estate
taxes.
At that point in time, the unified credit will drop down to the
amount prior to the TCJA - indexed for inflation. Also, keep in
mind that your estate may be subject to state income taxes.
Premium Financing
One way to protect future heirs is to insure your life so that
at your passing estate taxes can be paid with proceeds from
a high-value life insurance policy. Typically, in such
arrangements, the policy is held separate from the rest of
your estate - in a trust1.
An insurance policy can directly benefit your heirs and other
beneficiaries. The proceeds of the policy can be used to:
• Cover estate taxes and thereby avoid liquidating
assets or disrupting an investment portfolio
• Retain control of significant or illiquid assets, such
as a concentrated stock position
• Provide funds to sustain a business
Why Borrow?
Putting such protection in place comes at a significant cost
in the form of annual policy premiums. As a result, many
clients elect to finance those costs with a loan collateralized
by the cash surrender value of the policy, in addition to
marketable securities. This approach has the added benefit
of being tax efficient. The funds that the trust borrows to
pay the annual premiums and interest expenses generally
are available free of gift taxes.
Key Benefits
Financing the cost of an Indexed Universal Life insurance
policy can benefit you and ultimately your estate in many
ways, now and in the future, by allowing you to:
• Maximize insurance coverage without adversely
affecting your current cash flow (or lifestyle).
• Avoid having to sell assets - and potentially
triggering a taxable event - to cover the cost of the
premiums.
• Allow investments within the policy to grow free
of income taxes.
• Gain access to liquidity at an interest rate that is
often less expensive than a “policy loan”.
1 Trust should be with an independent, non-subordinated party to avoid exposure to insurance contract indirect “incidences of ownership” rules set forth
under IRS Sec. 2042.
What are the Risks?
With this plan there are some potential risks. In order to
reduce these risks, we stress test the plan in order to ensure
it will still provide favorable results in suboptimal conditions.
See additional details about these risks on the last page.
• Interest Rate Risk
• Policy Earnings Risk
• Collateral Risk
Introduction
Report Summary
• Guaranteed Universal Life
• Premium Finance at 6.58%
30 YEAR LEVEL TERMGUARANTEED
UNIVERSAL LIFE
PREMIUM FINANCE -
STRESS TEST AT 5.5%
PREMIUM FINANCE
AT 6.58%
Overview
Summary Values at Age 90 **
The chart below summarizes the key values of the three life insurance policy options at age 90 . An additional stress test (blue)
was conducted to the premium financing option to illustrate when a less favorable interest rate may be received.
$2,725,501Out of Pocket Costs $3,504,900 $7,440,186
$0
15.8%
$14,109,068
$16,173,679
6.8%
• 30 Year Level Term
13.5%
Death Benefit Internal
Rate of Return
Cash Value
Cash Value Internal
Rate of Return
$0 $27,109,068Death Benefit $20,000,000
5.4%
$0
No Cash Value
No Death Benefit
$257,937
No Cash Value
Cost Compared to
Benefit100%
NO ACTION TAKEN*
$36,164,733
$0
⚠ALERT: *If no action is taken, the estate taxes would be paid out of pocket which means assets may need to be liquidated
100% 37.20% 0.95% 16.85%
No Cash Value
No Death Benefit
$0 $6,173,679
3.1%
The goal is to show you the ability to leverage a life insurance
policy that provides the liquidity needed for estate taxes. This
also helps minimize the out of pocket expense normally
incurred when paying annual premiums.
By pledging collateral in lieu of paying premiums and interest,
you gain the unique ability to maintain control of your assets,
minimize opportunity costs associated with payments, and
minimize gift taxes.
In summary, we recommend the premium financing option of
an indexed universal life (IUL) insurance policy so you can
have the flexibility to plan for estate taxes while maintaining
control of your assets and cash flow.
An additional calculation was done to the premium
financing option. It is a “stress test” that accounts for a less
favorable interest rate. This is a beneficial way for you to
see how premium financing can withstand such unforeseen
events including stock market fluctuation and insurance
carrier modifications.
This premium financing report analyzes three specific life
insurance policies that are available in order to begin to
plan for estate taxes. The three comparisons included in this
report are:
This summary is not an offer, contract, or promise of future policy performance. Actual policy values may be more or less favorable than the nonguaranteed
values shown. Coverage is subject to the terms and conditions of the policy. The assumptions on which this summary is based a re subject to change on an
annual basis. **The selected age can be customized upon request.
Report Summary
Key Premium Finance Values
Total Out of Pocket Total Borrowed Total Premiums Leverage RatioEstimated Loan Pay off
AmountLoan Years
$257,937 $11,934,188 $11,934,188 46.3/1 $17,366,516 16
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
57 62 67 72 77 82 87 92
AgePremium Finance at 6.58% Premium Finance - Stress Test at 5.5%
30 Year Level Term Guaranteed Universal Life
($5,000,000)
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
57 62 67 72 77 82 87 92
AgePremium Finance at 6.58% Premium Finance - Stress Test at 5.5%
30 Year Level Term Guaranteed Universal Life
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
57 58 59 60 61 62 63 64 65 66
AgePremium Financed Out of Pocket
Death Benefit By Age
The graph to the left demonstrates
the amount of death benefit your
beneficiaries would receive at your
passing. Persuant to the terms of the
trust, the assets - less the loan
repayment amount - are distributed
to them free of estate and income
taxes.
Cash Value By Age
The graph to the left demonstrates
the additional cash value that comes
with the purchase of a permanent life
insurance policy. You may use the
policy’s cash value as part of the
collateral for the loan or access the
money if an unforeseen event occurs.
Notice that some life insurance
policies don't contain a cash value
component.
Annual Amount Paid by Year
The graph to the left illustrates the
amount of policy premium that will be
financed (blue) and the amount that
will be paid out of pocket (green).
Keep in mind, the client is responsible
for the out of pocket amount shown,
which can be used to pay either the
policy premium or the loan interest.
This summary is not an offer, contract, or promise of future policy performance. Actual policy values may be more or less favorable than the nonguaranteed
values shown. Cover is subject to the terms and conditions of the policy. The assumptions on which this summary is based are subject to change on an
annual basis. This summary is not valid without the corresponding insurance carrier illustration.
Rep
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PR
EM
IUM
FIN
AN
CE -
ST
RESS T
EST
AT
5.5
%3
0 Y
EA
R L
EV
EL T
ER
MG
UA
RA
NT
EED
UN
IVER
SA
L L
IFE
PR
EM
IUM
FIN
AN
CE A
T 6
.58
%
Belo
w is
a y
ear
by y
ear
bre
akd
ow
n o
f th
e t
hre
e life in
sura
nce
op
tio
ns
to h
elp
so
lve y
ou
r est
ate
tax
liab
ility
. In
clu
ded
is
the lo
an
ass
um
ptio
n f
or
yo
ur
pre
miu
m f
inan
cin
g p
olic
y a
s w
ell
as
a s
tress
test
(b
lue)
with
a less
favo
rab
le
inte
rest
rate
.
Pro
ject
ions
an
d info
rmatio
n in t
his
rep
ort
reg
ard
ing
po
tential o
utc
om
es
are
hyp
oth
etica
l an
d a
re n
ot
inte
nd
ed
to
reflect
act
ual re
sults
no
r g
uara
nte
e f
utu
re r
esu
lts.
Resu
lts
may
be m
ore
or
less
favo
rab
le d
ue t
o u
nco
ntr
olla
ble
fu
ture
data
su
ch a
s in
vest
men
tre
turn
s, in
flatio
n r
ate
s, t
ax
rate
s an
d p
rod
uct
exp
en
ses.
Rep
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t o
f P
ocket
Co
sts
Net
Cash
Valu
e
Aft
er
Lo
an
Rep
aym
en
t
Net
Death
Ben
efi
t
Aft
er
Lo
an
Rep
aym
en
t
Ou
t o
f P
ocket
Co
sts
Net
Cash
Valu
e A
fter
Lo
an
Rep
aym
en
t
Net
Death
Ben
efi
t
Aft
er
Lo
an
Rep
aym
en
t
87
31
$0
$0
$0
$218
,829
$0
$20,0
00,0
00
$0
$12
,162,5
62
$25,1
62,5
62
$0
$6,0
77,4
84
$16
,077,4
84
88
32
$0
$0
$0
$218
,829
$0
$20,0
00,0
00
$0
$12
,831,
546
$25,8
31,
546
$0
$6,1
64,2
71
$16
,164,2
71
89
33
$0
$0
$0
$218
,829
$0
$20,0
00,0
00
$0
$13
,484,1
15$26,4
84,1
15$0
$6,2
00,0
37
$16
,200,0
37
90
34
$0
$0
$0
$218
,829
$0
$20,0
00,0
00
$0
$14
,109,0
68
$27,1
09,0
68
$0
$6,1
73,6
79
$16
,173,6
79
91
35
$0
$0
$0
$218
,829
$0
$20,0
00,0
00
$0
$14
,670,6
23
$27,6
70,6
23
$0
$6,0
55,2
42
$16
,055,2
42
92
36
$0
$0
$0
$218
,829
$0
$20,0
00,0
00
$0
$15
,148,2
61
$28,1
48,2
61
$0
$5,8
26,5
95
$15
,826,5
95
93
37
$0
$0
$0
$218
,829
$0
$20,0
00,0
00
$0
$15
,522,4
30
$28,5
22,4
30
$0
$5,4
70,3
69
$15
,470,3
69
94
38
$0
$0
$0
$218
,829
$0
$20,0
00,0
00
$0
$15
,766,5
66
$28,7
66,5
66
$0
$4,9
63,8
57
$14
,963,8
57
95
39
$0
$0
$0
$218
,829
$0
$20,0
00,0
00
$0
$15
,849,7
60
$28,8
49,7
60
$0
$4,2
81,
110
$14
,281,
110
Belo
w is
a y
ear
by y
ear
bre
akd
ow
n o
f th
e t
hre
e life in
sura
nce
op
tio
ns
to h
elp
so
lve y
ou
r est
ate
tax
liab
ility
. In
clu
ded
is
the lo
an
ass
um
ptio
n f
or
yo
ur
pre
miu
m f
inan
cin
g p
olic
y a
s w
ell
as
a s
tress
test
(b
lue)
with
a less
favo
rab
le
inte
rest
rate
.
30
YEA
R L
EV
EL T
ER
MG
UA
RA
NT
EED
UN
IVER
SA
L L
IFE
PR
EM
IUM
FIN
AN
CE A
T 6
.58
%P
REM
IUM
FIN
AN
CE -
ST
RESS T
EST
AT
5.5
%
Pro
ject
ions
an
d info
rmatio
n in t
his
rep
ort
reg
ard
ing
po
tential o
utc
om
es
are
hyp
oth
etica
l an
d a
re n
ot
inte
nd
ed
to
reflect
act
ual re
sults
no
r g
uara
nte
e f
utu
re r
esu
lts.
Resu
lts
may
be m
ore
or
less
favo
rab
le d
ue t
o u
nco
ntr
olla
ble
fu
ture
data
su
ch a
s in
vest
men
tre
turn
s, in
flatio
n r
ate
s, t
ax
rate
s an
d p
rod
uct
exp
en
ses.
Pre
miu
m F
inan
ce a
t 6
.58
%B
elo
w a
re t
he p
rem
ium
fin
an
cin
g d
eta
ils o
f th
e r
eco
mm
en
ded
op
tio
n o
f an
in
dexe
d u
niv
ers
al lif
e (
IUL)
in
sura
nce
po
licy.
Clien
t A
ge
Year
Po
licy A
nn
ual
Pre
miu
m
Clien
t A
nn
ual
Co
ntr
ibu
tio
n
Bo
rro
wed
fro
m
Len
der
Pro
jecte
d Y
ear
En
d
Lo
an
Bala
nce
Pro
jecte
d L
oan
Inte
rest
Est
imate
d I
nte
rest
Rate
*
Cash
Valu
e N
et
of
Lo
an
Cash
Valu
e I
nte
rnal
Rate
of
Retu
rn
Death
Ben
efi
t N
et
of
Lo
an
Death
Ben
efi
t
Inte
rnal R
ate
of
Retu
rnO
uts
ide C
ollate
ral
57
1$1,
197,4
79
$4
2,5
11$1,
197,4
79
$1,
197,4
79
$4
2,5
113.5
5%
($13
3,9
68)
$19
,866,0
32
$13
3,9
68
58
2$1,
197,4
79
$85,7
39
$1,
197,4
79
$2,3
94
,958
$85,7
39
3.5
8%
($19
5,2
40)
$19
,804
,760
464
87.3
8%
$19
5,2
40
59
3$1,
197,4
79
$12
9,6
87
$1,
197,4
79
$3,5
92,4
37
$12
9,6
87
3.6
1%($
179,8
38)
$19
,820,1
62
1960.7
6%
$17
9,8
38
60
4$1,
197,4
79
$0
$1,
197,4
79
$4
,964
,269
$17
4,3
53
3.6
4%
($257,1
27)
$19
,74
2,8
73
600.6
9%
$257,1
27
61
5$1,
177,1
77
$0
$1,
177,1
77
$6,3
66,8
37
$225,3
91
3.6
7%
($294
,525)
$19
,705,4
75
307.6
7%
$294
,525
62
6$1,
193,4
19$0
$1,
193,4
19$7,8
39,9
85
$279,7
29
3.7
0%
($289,6
85)
$19
,710
,315
196.3
7%
$289,6
85
63
7$1,
193,4
19$0
$1,
193,4
19$9,3
70,3
50
$336,9
46
3.7
3%
($236,0
61)
$19
,763,9
39
141.
21%
$236,0
61
64
8$1,
193,4
19$0
$1,
193,4
19$10
,960,9
67
$397,1
98
3.7
6%
($12
8,0
03)
$19
,871,
997
109.2
6%
$12
8,0
03
65
9$1,
193,4
19$0
$1,
193,4
19$12
,615
,037
$4
60,6
51
3.7
9%
$4
0,9
23
-24
.38%
$20,0
40,9
23
88.7
6%
$0
66
10$1,
193,4
19$0
$1,
193,4
19$14
,335,9
39
$527,4
83
3.8
2%
$328,7
123.2
1%$20,3
28,7
1274
.71%
$0
67
11$0
$0
$0
$14
,887,8
73
$551,
934
3.8
5%
$701,
576
12.2
0%
$20,7
01,
576
64
.52%
$0
68
12$0
$0
$0
$15
,465,5
23
$577,6
49
3.8
8%
$1,
113,6
83
16.2
7%
$21,
113,6
83
56.7
9%
$0
69
13$0
$0
$0
$16
,070,2
24
$604
,702
3.9
1%$1,
594
,207
18.5
4%
$21,
594
,207
50.7
8%
$0
70
14$0
$0
$0
$16
,703,3
91
$633,1
67
3.9
4%
$2,1
21,
221
19.7
1%$22,1
21,
221
45.9
6%
$0
71
15$0
$0
$0
$17
,366,5
16$663,1
25
3.9
7%
$2,6
94
,511
20.2
7%
$22,6
94
,511
42.0
2%
$0
72
16$0
$0
$0
$3,1
14,2
73
19.9
2%
$16
,114
,273
35.0
9%
$0
73
17$0
$0
$3,5
64
,959
19.5
4%
$16
,564
,959
32.6
2%
$0
74
18$0
$0
$4
,04
6,5
31
19.1
5%
$17
,04
6,5
31
30.5
1%$0
75
19$0
$0
$4
,558,5
49
18.7
5%
$17
,558,5
49
28.6
9%
$0
76
20
$0
$0
$5,1
00,1
75
18.3
5%
$18
,100,1
75
27.0
9%
$0
77
21
$0
$0
$5,6
69,8
20
17.9
6%
$18
,669,8
20
25.6
9%
$0
78
22
$0
$0
$6,2
65,5
89
17.5
7%
$19
,265,5
89
24
.44
%$0
79
23
$0
$0
$6,8
84
,553
17.1
9%
$19
,884
,553
23.3
3%
$0
80
24
$0
$0
$7,5
21,
953
16.8
1%$20,5
21,
953
22.3
2%
$0
81
25
$0
$0
$8,1
67,0
07
16.4
4%
$21,
167,0
07
21.
41%
$0
82
26
$0
$0
$8,8
08,1
46
16.0
6%
$21,
808,1
46
20.5
8%
$0
83
27
$0
$0
$9,4
63,7
80
15.7
0%
$22,4
63,7
80
19.8
1%$0
84
28
$0
$0
$10
,130,6
07
15.3
5%
$23,1
30,6
07
19.1
1%$0
85
29
$0
$0
$10
,804
,364
15.0
1%$23,8
04
,364
18.4
6%
$0
86
30
$0
$0
$11
,483,7
21
14.6
9%
$24
,483,7
21
17.8
6%
$0
LO
AN
AN
D P
REM
IUM
SU
MM
AR
YP
OLIC
Y V
ALU
ES
Pro
ject
ion
s an
d in
form
atio
n in
th
is r
ep
ort
reg
ard
ing
po
ten
tial o
utc
om
es
are
hyp
oth
etica
l an
d a
re n
ot
inte
nd
ed
to
reflect
act
ual re
sults
no
r g
uara
nte
e f
utu
re r
esu
lts.
Resu
lts
may
be m
ore
or
less
favo
rab
le d
ue t
o u
nco
ntr
olla
ble
fu
ture
data
su
ch a
s in
vest
men
t re
turn
s, in
flatio
n r
ate
s, t
ax
rate
s an
d p
rod
uct
exp
en
ses.
*Th
e in
itia
l est
imate
d in
tere
st r
ate
is
3.5
50%
with
a s
imp
le a
nn
ual in
crease
of
.030%
an
d a
cap
of
5.5
0%
Pre
miu
m F
inan
ce a
t 6
.58
%B
elo
w a
re t
he p
rem
ium
fin
an
cin
g d
eta
ils o
f th
e r
eco
mm
en
ded
op
tio
n o
f an
in
dexe
d u
niv
ers
al lif
e (
IUL)
in
sura
nce
po
licy.
Clien
t A
ge
Year
Po
licy
An
nu
al
Pre
miu
m
Clien
t A
nn
ual
Co
ntr
ibu
tio
n
Bo
rro
wed
fro
m
Len
der
Pro
ject
ed
Year
En
d
Lo
an
Bala
nce
Pro
ject
ed
Lo
an
Inte
rest
Est
imate
d I
nte
rest
Rate
*
Cash
Valu
e N
et
of
Lo
an
Cash
Valu
e I
nte
rnal
Rate
of
Retu
rn
Death
Ben
efi
t N
et
of
Lo
an
Death
Ben
efi
t
Inte
rnal R
ate
of
Retu
rnO
uts
ide C
ollate
ral
87
31
$0
$0
$12
,162,5
62
14.3
7%
$25,1
62,5
62
17.3
0%
$0
88
32
$0
$0
$12
,831,
54
614
.06%
$25,8
31,
54
616
.77%
$0
89
33
$0
$0
$13
,484
,115
13.7
6%
$26,4
84
,115
16.2
8%
$0
90
34
$0
$0
$14
,109,0
68
13.4
6%
$27,1
09,0
68
15.8
2%
$0
91
35
$0
$0
$14
,670,6
23
13.1
5%
$27,6
70,6
23
15.3
7%
$0
92
36
$0
$0
$15
,14
8,2
61
12.8
5%
$28,1
48,2
61
14.9
4%
$0
93
37
$0
$0
$15
,522,4
30
12.5
4%
$28,5
22,4
30
14.5
2%
$0
94
38
$0
$0
$15
,766,5
66
12.2
1%$28,7
66,5
66
14.1
2%
$0
95
39
$0
$0
$15
,84
9,7
60
11.8
8%
$28,8
49,7
60
13.7
2%
$0
LO
AN
AN
D P
REM
IUM
SU
MM
AR
YP
OLIC
Y V
ALU
ES
Pro
ject
ions
and
info
rmatio
n in t
his
rep
ort
reg
ard
ing
po
tential o
utc
om
es
are
hyp
oth
etica
l and
are
no
t in
tend
ed
to
reflect
act
ual re
sults
no
r g
uara
nte
e f
utu
re r
esu
lts.
Resu
lts
may b
e m
ore
or
less
favo
rab
le d
ue t
o u
nco
ntr
olla
ble
futu
re d
ata
such
as
inve
stm
ent
retu
rns,
inflatio
n r
ate
s,
tax
rate
s and
pro
duct
exp
ense
s. *
The initia
l est
imate
d inte
rest
rate
is
3.5
50%
with a
sim
ple
annual in
crease
of
.030%
and
a c
ap
of
5.5
0%
Pre
miu
m F
inan
ce -
Str
ess
Test
at
5.5
%B
elo
w is
a s
tress
test
of
the r
eco
mm
en
ded
op
tio
n o
f an
in
dexe
d u
niv
ers
al lif
e (
IUL)
in
sura
nce
po
licy.
Clien
t A
ge
Year
Po
licy A
nn
ual
Pre
miu
m
Clien
t A
nn
ual
Co
ntr
ibu
tio
n
Bo
rro
wed
fro
m
Len
der
Pro
jecte
d Y
ear
En
d
Lo
an
Bala
nce
Pro
jecte
d L
oan
Inte
rest
Est
imate
d I
nte
rest
Rate
*
Cash
Valu
e N
et
of
Lo
an
Cash
Valu
e I
nte
rnal
Rate
of
Retu
rn
Death
Ben
efi
t N
et
of
Lo
an
Death
Ben
efi
t
Inte
rnal R
ate
of
Retu
rnO
uts
ide C
ollate
ral
57
1$1,
197,4
79
$4
2,5
11$1,
197,4
79
$1,
197,4
79
$4
2,5
113.5
5%
($14
6,8
66)
$19
,853,1
34
$14
6,8
66
58
2$1,
197,4
79
$87,4
16$1,
197,4
79
$2,3
94
,958
$87,4
163.6
5%
($235,0
10)
$19
,764
,990
46394
.37%
$235,0
10
59
3$1,
197,4
79
$13
4,7
16$1,
197,4
79
$3,5
92,4
37
$13
4,7
163.7
5%
($262,2
30)
$19
,737,7
70
1954
.40%
$262,2
30
60
4$1,
197,4
79
$18
4,4
12$1,
197,4
79
$4
,789,9
16$18
4,4
123.8
5%
($225,4
84
)$19
,774
,516
599.5
7%
$225,4
84
61
5$1,
177,1
77
$235,7
00
$1,
177,1
77
$5,9
67,0
93
$235,7
00
3.9
5%
($11
7,4
23)
$19
,882,5
77
303.1
0%
$11
7,4
23
62
6$1,
193,4
19$290,0
01
$1,
193,4
19$7,1
60,5
12$290,0
01
4.0
5%
$65,0
60
$20,0
65,0
60
188.7
3%
$0
63
7$1,
193,4
19$34
6,6
88
$1,
193,4
19$8,3
53,9
31
$34
6,6
88
4.1
5%
$328,7
67
$20,3
28,7
67
131.
21%
$0
64
8$1,
193,4
19$4
05,7
62
$1,
193,4
19$9,5
47,3
50
$4
05,7
62
4.2
5%
$679,4
98
-22.6
7%
$20,6
79,4
98
97.5
4%
$0
65
9$1,
193,4
19$4
67,2
23
$1,
193,4
19$10
,74
0,7
69
$4
67,2
23
4.3
5%
$1,
123,7
04
-13.4
2%
$21,
123,7
04
75.8
4%
$0
66
10$1,
193,4
19$531,
071
$1,
193,4
19$11
,934
,188
$531,
071
4.4
5%
$1,
718
,670
-6.9
7%
$21,
718
,670
60.9
3%
$0
67
11$0
$0
$0
$12
,477,1
94
$54
3,0
06
4.5
5%
$1,
855,5
25
-10.2
3%
$21,
855,5
25
49.5
6%
$0
68
12$0
$0
$0
$13
,057,3
83
$580,1
90
4.6
5%
$1,
993,2
10-6
.48%
$21,
993,2
104
1.71%
$0
69
13$0
$0
$0
$13
,677,6
09
$620,2
26
4.7
5%
$2,1
56,7
05
-3.9
9%
$22,1
56,7
05
35.8
1%$0
70
14$0
$0
$0
$14
,34
0,9
73
$663,3
64
4.8
5%
$2,3
19,5
14-2
.35%
$22,3
19,5
1431.
27%
$0
71
15$0
$0
$0
$15
,050,8
51
$709,8
78
4.9
5%
$2,4
76,5
82
-1.2
2%
$22,4
76,5
82
27.6
8%
$0
72
16$0
$0
$0
$2,7
25,0
45
0.0
0%
$15
,725,0
45
20.4
0%
$0
73
17$0
$0
$2,9
82,2
55
0.9
1%$15
,982,2
55
18.5
6%
$0
74
18$0
$0
$3,2
46,0
97
1.62%
$16
,24
6,0
97
17.0
4%
$0
75
19$0
$0
$3,5
13,9
09
2.1
5%
$16
,513
,909
15.7
6%
$0
76
20
$0
$0
$3,7
82,4
83
2.5
7%
$16
,782,4
83
14.6
7%
$0
77
21
$0
$0
$4
,065,2
81
2.9
1%$16
,065,2
81
13.2
7%
$0
78
22
$0
$0
$4
,34
4,1
46
3.1
7%
$16
,34
4,1
46
12.4
9%
$0
79
23
$0
$0
$4
,614
,017
3.3
5%
$16
,614
,017
11.8
1%$0
80
24
$0
$0
$4
,868,0
23
3.4
8%
$16
,868,0
23
11.1
9%
$0
81
25
$0
$0
$5,0
93,6
46
3.5
4%
$17
,093,6
46
10.6
4%
$0
82
26
$0
$0
$5,3
16,1
78
3.5
9%
$16
,316
,178
9.8
0%
$0
83
27
$0
$0
$5,5
18,2
31
3.6
0%
$16
,518
,231
9.3
6%
$0
84
28
$0
$0
$5,6
94
,511
3.5
8%
$16
,694
,511
8.9
6%
$0
85
29
$0
$0
$5,8
38,7
81
3.5
3%
$16
,838,7
81
8.5
9%
$0
86
30
$0
$0
$5,9
47,1
27
3.4
6%
$16
,94
7,1
27
8.2
3%
$0
LO
AN
AN
D P
REM
IUM
SU
MM
AR
YP
OLIC
Y V
ALU
ES
Pro
ject
ion
s an
d in
form
atio
n in
th
is r
ep
ort
reg
ard
ing
po
ten
tial o
utc
om
es
are
hyp
oth
etica
l an
d a
re n
ot
inte
nd
ed
to
reflect
act
ual re
sults
no
r g
uara
nte
e f
utu
re r
esu
lts.
Resu
lts
may
be m
ore
or
less
favo
rab
le d
ue t
o u
nco
ntr
olla
ble
fu
ture
data
su
ch a
s in
vest
men
t re
turn
s, in
flatio
n r
ate
s, t
ax
rate
s an
d p
rod
uct
exp
en
ses.
*Th
e in
itia
l est
imate
d in
tere
st r
ate
is
3.5
50%
with
a s
imp
le a
nn
ual in
crease
of
.10%
an
d a
cap
of
5.5
0%
Pre
miu
m F
inan
ce -
Str
ess
Test
at
5.5
%B
elo
w is
a s
tress
test
of
the r
eco
mm
en
ded
op
tio
n o
f an
in
dexe
d u
niv
ers
al lif
e (
IUL)
in
sura
nce
po
licy.
Clien
t A
ge
Year
Po
licy
An
nu
al
Pre
miu
m
Clien
t A
nn
ual
Co
ntr
ibu
tio
n
Bo
rro
wed
fro
m
Len
der
Pro
ject
ed
Year
En
d
Lo
an
Bala
nce
Pro
ject
ed
Lo
an
Inte
rest
Est
imate
d I
nte
rest
Rate
*
Cash
Valu
e N
et
of
Lo
an
Cash
Valu
e I
nte
rnal
Rate
of
Retu
rn
Death
Ben
efi
t N
et
of
Lo
an
Death
Ben
efi
t
Inte
rnal R
ate
of
Retu
rnO
uts
ide C
ollate
ral
87
31
$0
$0
$6,0
77,4
84
3.4
0%
$16
,077,4
84
7.6
5%
$0
88
32
$0
$0
$6,1
64
,271
3.3
2%
$16
,164
,271
7.3
6%
$0
89
33
$0
$0
$6,2
00,0
37
3.2
2%
$16
,200,0
37
7.0
8%
$0
90
34
$0
$0
$6,1
73,6
79
3.0
8%
$16
,173,6
79
6.8
0%
$0
91
35
$0
$0
$6,0
55,2
42
2.9
0%
$16
,055,2
42
6.5
3%
$0
92
36
$0
$0
$5,8
26,5
95
2.6
6%
$15
,826,5
95
6.2
4%
$0
93
37
$0
$0
$5,4
70,3
69
2.3
6%
$15
,470,3
69
5.9
5%
$0
94
38
$0
$0
$4
,963,8
57
1.96%
$14
,963,8
57
5.6
4%
$0
95
39
$0
$0
$4
,281,
110
1.4
3%
$14
,281,
110
5.3
1%$0
LO
AN
AN
D P
REM
IUM
SU
MM
AR
YP
OLIC
Y V
ALU
ES
Pro
ject
ions
and
info
rmatio
n in t
his
rep
ort
reg
ard
ing
po
tential o
utc
om
es
are
hyp
oth
etica
l and
are
no
t in
tend
ed
to
reflect
act
ual re
sults
no
r g
uara
nte
e f
utu
re r
esu
lts.
Resu
lts
may b
e m
ore
or
less
favo
rab
le d
ue t
o u
nco
ntr
olla
ble
futu
re d
ata
such
as
inve
stm
ent
retu
rns,
inflatio
n r
ate
s,
tax
rate
s and
pro
duct
exp
ense
s. *
The initia
l est
imate
d inte
rest
rate
is
3.5
50%
with a
sim
ple
annual in
crease
of
.10%
and
a c
ap
of
5.5
0%
Next Steps
We will work together along the way to put this plan into action or make any adjustments necessary. In addition to these steps, we will check
qualifications and go through the documents that will be required on your end. The actual timeline could be quicker or slower than the
estimates below, based on a number of factors.
Carrier Underwriting Process (6-12 weeks)
There will be a carrier application which will include a confidential client questionnaire, financial
supplement and trust supplement documents. If the trust isn't completely set up yetb we will set
up the trust at this time. Expect the carrier to come back with more requirements and questions.
Loan Process (4-8 weeks)
Once you are medically approved by the insurance carrier, we will complete the bank loan
application and other requirements by the bank. Expect the bank to come back with more
requirements and questions.
Closing (1 week)
Set up appointment with client and trustee for closing and policy delivery.
This is a sample of LifePro's Leveraged Estate Preservation Plan Report.
Let's create a custom one for your clients. Call 1-888-LIFEPRO today!
Disclosures
Copyright © All rights reserved.
Sample Agent
Tel: (888)543-3776
https://www.google.com
(1) It's important to note that today's tax laws could change at any time. A target for future tax rate increases to help pay our nation's growing debt
(whether federal estate taxes, federal income tax rates or proposed wealth taxes) are the wealthy.
For the alternatives the values used come directly from the life insurance carrier illustration. For the premium finance and stress test values the numbers are
a combination of the values from the insurance carrier illustrations and the premium finance assumptions. This summary is not valid without the
corresponding insurance carrier illustration. The insurance carrier is bound only by the term of the life insurance contracts it issues.
Please review that all of the inputs are the same as the completed fact finder and that the assumptions made above for this report and in the corresponding
carrier illustrations for accuracy. If you see the need to change these assumptions or have corrections, let me know and the report will be updated.
This report is for informational purposes only. This report and the analysis herein are based on certain assumptions and information selected by the
financial professional who provided this report.
Any guarantees are backed by the claims paying ability of the insurance company and are subject to change. No representation is made as to the
accurateness of the analysis. Please see a full insurance carrier proposal for any products mentioned in this analysis.
The content of this report is not intended to provide legal, tax, or accounting advice. Tax rules and calculations are not used in this analysis.Please consult
your tax advisor for specific tax advice.
The premium finance vendor has relationships with lenders and financial institutions and often times makes introductions and facilitates relationships
between clients and such lenders and financial institutions, and such parties may engage to do business together.
Policy loans and withdrawals reduce the policy’s cash value and death benefit and may result in a taxable event. Withdrawals up to the basis paid into the
contract and loans thereafter will not create an immediate taxable event, but substantial tax ramifications could result upon contract
lapse or surrender. Surrender charges may reduce the policy's cash value in early years. The ability to internally fund a life insurance contract to meet loan
requirements will be dependent upon the performance of the contract and is not guaranteed. If remaining policy values and scheduled premiums are
insufficient, additional out-of-pocket payments may be needed to keep the policy in force.
The following is some detail on the risks of premium finance.
Interest rate risk – the borrowing interest rates from the lender are generally variable tied to LIBOR plus a spread. The risk is that LIBOR or the prevailing
interest rate environment increases which adds to the interest payments and potentially to the loan balance if the loan interest is accruing.
Policy earnings risk – the growth rate assumptions on the life insurance policy are generally tied to stock market based index allocations. Historically the
policy earnings have been higher than the borrowing rates from the lender. If the life insurance policy underperforms additional interest and/or collateral
may be required.
Collateral risk – outside collateral other than the life insurance policy is often needed with a premium finance transaction. If interest rates increase and/or
the life insurance policy underperforms additional collateral may be required to make the lender whole. The outside collateral (stocks, real estate, etc.) may
fall in value which may also prompt additional collateral.
Nothing in this document shall be misinterpreted as presenting any sort of guarantee of performance.