Premium Financed Life Insurance

[BiggitySwat]

The upline is STI.... his comments earlier were to just throw you all off......

 

[Mr. Bill]

Spam? I am who I say and many people discuss STOLI/IOLI, 2 and flip, whatever they call it and unfortunately that is what "premium financing" has become know as. Traditional recourse premium financing is nothing like it. All of our clients are long term holds for estate planning can afford to "write the check" but choose not to. Why? Why should they when they can borrow the money from a third party? If they earn 10% in their business why not borrow funds at 6% to pay premium?

Also, someone mentioned targets earlier. In my experience targets average about $500k and some get well above seven figures.

Hope this adds value.

Was that a trick question? What policy is paying 10% this year, and where can I borrow at 6%?

 

[metkevin]

Was that a trick question? What policy is paying 10% this year, and where can I borrow at 6%?

He said they make 10% return on their personal business a year, so its better value of dollar if they borrow at 6% they can make their money earn 10%. Hard stretch to get traditional financing at 6% but under 10% is still possible.

 

[Marpol]

He said they make 10% return on their personal business a year, so its better value of dollar if they borrow at 6% they can make their money earn 10%. Hard stretch to get traditional financing at 6% but under 10% is still possible.

As Newtw will probably tell you it is not that hard to get a rate below 6%. Traditional premium finance rate are around LIBOR + 100bps to 300bps depending on type of collateral and loan size.

Last I checked 1 year LIBOR was at 3.13% so an interest rate of 4%-5% is not uncommon.

This is what makes traditional Premium Financing so attractive to some people. There is a definite arbitrage opportunity between the rate of return in a personal business or investment and premium financing rates.

 

[Mr. Bill]

As Newtw will probably tell you it is not that hard to get a rate below 6%. Traditional premium finance rate are around LIBOR + 100bps to 300bps depending on type of collateral and loan size.

Last I checked 1 year LIBOR was at 3.13% so an interest rate of 4%-5% is not uncommon.

This is what makes traditional Premium Financing so attractive to some people. There is a definite arbitrage opportunity between the rate of return in a personal business or investment and premium financing rates.

Ah, but not that simple. It will depend on a number of things, including the amount financed.

Still wondering who has best loan rates right now!