Life insurance can help provide greater protections for your loved ones.
Do you have a family? Do your family members depend on you for financial support?
Do you own your own business?
According to a recent article titled “What Is Premium-Financed Life Insurance?,” if the answer is yes to either of these, life insurance may be a good estate planning tool for you.
You could secure premium financing.
What is premium financing?
Premium financing is when you borrow money to pay for life insurance.
How does one secure premium financing?
You could borrow from a third party lender.
Although you are responsible for paying back the loan with interest, some of the tax-free growth in your life insurance policy could help you pay off this loan.
The interest payment plan can vary but is often payed annually.
Sometimes the life insurance policy is used for the collateral.
Can you make adjustments over time?
This is common.
There are very few successful entrepreneurs taking advantage of this solution.
For many entrepreneurs this is a good but often under-utilized option.
Work with an experienced financial planner or estate planning attorney to help you determine whether this a suitable tool for you.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Forbes (October 20, 2017) “What Is Premium-Financed Life Insurance?”