1. A service provided by BAKER ASSOCIATES
Premium Financing
A service provided by
BAKER ASSOCIATES

2. What is Premium Financing?
Premium Financing is a method for individuals to fund a life insurance policy without using liquid assets.

3. How does it work? Borrower applies for life insurance policy
Baker Associates will fight for best possible underwriting offer
Borrower applies for premium financing through a third party lender

4. Third party lender Sets interest rate and payment schedule for loan
Requires collateral
Life insurance policy
Additional assets
Baker Associates works with several carriers and banking facilities

5. Third party lenders

6. Third party lenders

7. Possible Client High net worth client Large insurance need
Assets highly productive or illiquid
Reluctant to free up premium dollars

8. Client Eligibility $5,000,000 Net Worth minimum
$100,000 minimum annual loan (premium)
Ability to post additional collateral if needed
Borrower must be an entity (Trust/ Corporation)
Individuals eligible in CA and NY

9. BAKER ASSOCIATES Borrower (Trust) Broker Baker Associates
(G)
Baker
Associates
Insurance Company
(B)
(C)
(A) Borrower requests services from broker (B) Broker engages Baker Associates
(C) Baker Associates develops insurance program (D) Baker Associates presents to Bank (E) Bank makes offer and documents loan (F) Bank secures collateral (G) Death Benefit satisfies outstanding loan with balance paid to the Borrower
(D)
(G)
Bank
(Lender)
(F)

10. Concerns
Interest rate risk
Collateral requirements
Potential loan maturity
Unrealistic market expectations
Most of these concerns are mitigated by proper structuring of the life insurance policy and loan.

11. Benefits Reduced out-of-pocket cost for life insurance coverage
Minimal or no impact on current investment portfolio
Attractive interest crediting rates on borrowed funds
Effective gift tax considerations

12. Example of Benefits 45 55 65 Term Insurance Premium Finance $249,300
Client Age
Total Costs for 20 years*
1st year out of pocket costs
Saving to acquire Permanent Insurance w/Premium Financing 45
$249,300
$117,448
$46,675
$131,852 55
$595,300
$193,267
$62,500
$402,033 65
$1,959,300
$665,360
$95,750
$1,293,940
*Based on preferred non-smoker rate; interest on premium loan capitalized.

13. Baker Associates’ Services
Collection of required information for insurance policy
Case design and illustration
Tenacious underwriting for client
Assist you in explaining options to client
Negotiate to provide the best financing available for your client

14. What carriers participate?
Through Baker Associates you can access this special program with one of these top insurance carriers:
John Hancock/ Manulife
American General
MONY/AXA
Jefferson Pilot
Lincoln Life

15. Contact Baker Associates
Gary M Baker:
Frank Azar:
Lori Calloway:
Lisa Sauer:
BAKER
ASSOCIATES
7502 E Pinnacle Peak Rd, Ste 116B
Scottsdale, AZ 85255