I really like reading other advisor’s posts regarding retirement planning and especially Advanced High Net Worth Planning strategies.
In this article the concept of PFIUL or premium financed indexed universal life insurance is being raised. This concept is great when working with very high net worth clients.
Advanced High Net Worth Planning
The overall concept is to secure wealth inside of permanent life insurance products. The reason to do such a thing is the tax advantages. We are not using life insurance for the death benefit, we are using it for the living benefits.
What is called Cash Value. Cash Value can be borrowed from a policy – tax free. Income tax advantages are the reason to use this strategy.
This strategy can work with the average joe. It can have advantages, yet the approach must be carefully considered.
High net worth clients can consider premium financing. This means borrowing money to pay for the policy. At some point the policy pays for the loan.
If you consider this path, you must locate an advisor you trust. Pay careful attention to the cited interest rates. Why? Because ultimately you will be betting on the arbitrage to come out ahead.