Northstar Funding Partners
Northstar Funding Partners

Premium Finance

What is Premium Finance

Northstar Funding Partners provides premium financing services through its “Best in Class” network of Lenders and exclusive ZS Platform for high net worth individuals and business owners.

To finance a premium, the individual or company requesting insurance must sign a premium finance agreement with an approved premium finance lender.

The premium finance lender then pays the insurance premium on behalf of individual or company, usually in annual installments, for the cost of the program.

Typically, clients that engage in this transaction are age 29 to 80 with net worth of $5MM or greater

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Premium Finance Benefits

Premium Financing is a way to pay for life insurance premiums by borrowing money. There are a number of benefits to this, including:

  • Eliminating the need for large up-front premium payments.
  • Keeping your own capital invested in other assets.
  • Avoiding the high cost of paying premiums with after-tax dollars.

Premium financing can be a good option for people who need life insurance coverage but don’t have the cash on hand to pay for the premiums. However, it’s important to weigh the benefits and risks before deciding whether or not to finance your premiums.

Here are some of the risks of premium financing:

  • You’ll have to repay the loan, plus interest.
  • The interest rate on the loan may be variable, so it could go up in the future.
  • If you don’t keep up with your payments, you could lose your life insurance policy.

If you’re considering premium financing, it’s important to talk to a financial advisor to get personalized advice. They can help you assess your financial situation and determine if premium financing is right for you.

Here are some additional things to consider when evaluating premium financing:

  • The amount of the loan.
  • The interest rate on the loan.
  • The term of the loan.
  • The collateral required for the loan.
  • The prepayment penalties, if any.

It’s also important to understand the tax implications of premium financing. In some cases, the interest on the loan may be tax-deductible. However, you’ll need to consult with a tax advisor to determine your specific situation.

Traditional & I.R.A. Insured Retirement Advantage ® Client Profile

  • No Minimum age… maximum age of 80.
  • Net Worth $5MM or greater for “Traditional” transactions (some exceptions may apply via Carrier Guidelines)
  • The I.R.A. Insured Retirement Advantage ® minimum income is $150,000 annually. (Supported by 2yrs Tax Returns)
  • For the I.R.A. Insured Retirement Advantage ® Clients there is a liquidity requirement determined by premium and face amount
  • Business-owners, Entrepreneurs or Professionals desire to retain their capital while maximizing wealth transfer
  • Has need to fund an Estate Planning strategy
  • Has desire to fund charitable intent
  • Desires to fund potential Supplemental retirement income
  • Business Owners needing to fund Buy Sell Agreements
  • Business Owner needing to fund Key Person Policy
  • Business Owner needs to fund Executive Compensation Plans

Our Primary Lenders provides advantages surpassing those of most other lending entities.

Most of our lending partner does not require clients to re-qualify for their loan annually… they simply must be able to address and/or post any additional collateral when and if required.

  • Most of our lending partner provide:
  • 95% to 100% Advance Rate (i.e. credit on CSV) for the purpose of establishing potential additional collateral requirements.
  • Do NOT require a Personal Guarantee (PG) on the loan (some exceptions may apply)
  • Offer unique borrowing structure that may offer the potential for tax advantaged interest payment structures
  • Offer the option to accrue (i.e. roll up) interest. (some carriers restrict and/or forbid this consumer friendly benefit / option)
  • Allows the client to determine the exact $$ amount they prefer to pay in interest payments (if any)
  • Offer MYG Loan Interest Rates… and Rate Caps available at any time throughout the life of the loan for periods up to but not exceeding 5 -10 years. (some exceptions may apply)
  • Offer a client the option to implement a Rate Cap or Collar thereby capping the loan interest rate for up to 5 years
  • Most of our lenders are Balance Sheet Lender

Select the insurance carrier of your choice or let one of the Northstar Staff Member help you!

Why Should You Finance Life Insurance

High-income professionals do not pay for life insurance. As a professional, you have worked hard to reach where you are today. Each step you took since childhood has brought you income and fame that most people only dream of. Do not put your wealth and success at risk. Life insurance should be a critical part of your financial strategy.

Life insurance is now an advanced technique that provides death benefit protection to your loved ones, safeguards your future wealth, and can even generate additional income. And you can obtain millions of dollars of life insurance coverage with little out-of-pocket expense.

You finance your home, cars, boats, planes, and more. You can also finance your life insurance. Life insurance premium finance can be the ideal solution for high-income professionals who appreciate the benefits of life insurance but prefer not to use current income and wealth to pay for it.

  • Maintain assets and investment portfolios.
  • Borrow at competitive interest rates.
  • Minimize out-of-pocket costs.
  • Use a variety of assets for collateral.
  • The cash value of the life insurance policy, over time, can completely collateralize the loan.

And enjoy unique tax advantages and security. Tax-free income for life. Guarantees not available with other investments. Stock market participation without downside risks. Tax-free death benefits.

Northstar Funding Partners offers and designs unique and powerful strategies.