7 Possible Client High net worth client Large insurance need Assets highly productive or illiquidReluctant 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 neededBorrower must be an entity (Trust/ Corporation)Individuals eligible in CA and NY
9 BAKER ASSOCIATES Borrower (Trust) Broker Baker Associates (G)BakerAssociatesInsurance 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 ConcernsInterest rate riskCollateral requirementsPotential loan maturityUnrealistic market expectationsMost 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 portfolioAttractive interest crediting rates on borrowed fundsEffective gift tax considerations
12 Example of Benefits 45 55 65 Term Insurance Premium Finance $249,300 Client AgeTotal Costs for 20 years*1st year out of pocket costsSaving to acquire Permanent Insurance w/Premium Financing45$249,300$117,448$46,675$131,85255$595,300$193,267$62,500$402,03365$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 policyCase design and illustrationTenacious underwriting for clientAssist you in explaining options to clientNegotiate 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/ ManulifeAmerican GeneralMONY/AXAJefferson PilotLincoln Life
15 Contact Baker Associates Gary M Baker:Frank Azar:Lori Calloway:Lisa Sauer:BAKERASSOCIATES7502 E Pinnacle Peak Rd, Ste 116BScottsdale, AZ 85255