For ultra-high-net-worth families
A large policy shouldn't have to be paid for by liquidating what's working.
Financing the premiums on substantial life insurance so committed capital stays committed — designed conservatively, stress-tested, and reviewed every year.
In Drew’s Words
Premium Finance
Simply Explained
When an estate plan calls for a very large life insurance policy, funding it from cash can mean selling assets that are doing productive work — an operating business, real estate, a concentrated position with a low basis. Premium financing borrows the premium instead, with the policy and pledged collateral as security.
This is a genuinely sophisticated strategy and it carries real risk. Interest rates move, policy crediting can underperform the illustration, and collateral requirements can increase. It works when the arrangement is designed with conservative assumptions and monitored annually. It fails when it is sold once and never looked at again.
We model what happens when rates and crediting assumptions move against you — not just the favorable illustration — and review the loan and the policy every year for as long as the arrangement is in place.
How It Works
Suitability review
Before design, we establish whether the need is real, the collateral is durable, and the family is genuinely comfortable holding leverage for the long term.
Design and stress test
Structures are modeled against rising rates and underperforming crediting, not just the carrier's illustration.
Lender and carrier coordination
We coordinate the loan terms and the policy design together, since a change to either affects the other.
Annual review
Loan balance, collateral position, policy performance, and exit strategy are reviewed every year and reported to you in writing.
Who this is for
- Families with substantial estate liquidity needs and the net worth to support pledged collateral
- Owners whose capital is committed to an operating business or real estate and would rather not liquidate it to fund premiums
- Families who already understand leverage and want it structured and monitored rather than avoided
Who this isn’t for
- Anyone who needs certainty about what the arrangement will cost over its life
- Anyone who cannot comfortably post and maintain collateral if requirements increase
- Anyone being shown premium financing as a way to obtain coverage they could not otherwise afford
Questions
What actually goes wrong with premium financing?
Two things, usually together: borrowing costs rise above what was illustrated, and policy crediting comes in below it. The gap has to be funded from somewhere — additional collateral, out-of-pocket premiums, or unwinding the arrangement. That is why the design assumptions matter more than the illustration and why annual monitoring is not optional.
What happens if I want out?
Every arrangement should have a defined exit before it is put in place — repaying the loan from other assets, using policy values, or surrendering the policy and settling the balance. Each has different tax and economic consequences. We put the exit in writing at the outset rather than improvising it later.
Is this the same as borrowing against a policy?
No. A policy loan borrows from the insurance carrier against accumulated cash value. Premium financing borrows from a third-party lender to pay the premiums themselves, secured by the policy and additional pledged collateral. The risks and the mechanics are different.
Related services
Planning rarely stops at one decision. These are the pieces that most often sit alongside premium finance for ultra-high-net-worth families.
- Private Placement Life Insurance
Institutionally priced life insurance that lets qualified purchasers hold tax-inefficient strategies inside a policy wrapper — where it genuinely fits, and only there.
- Estate & Trust Planning
Wills, trusts, and beneficiary designations coordinated with your actual financial plan — reviewed and implemented under one roof alongside our legal counsel, not left to gather dust.