Life insurance premium financing is a specialized strategy that has gained favor in recent years for high net worth individuals looking to purchase large life insurance policies without tapping their personal or business cash flow.  For these qualified wealthy individuals, the retained capital that would go to pay a premium can be better utilized for investment opportunities they believe will outperform the cost of the third-party financing.

Prospects for these strategies include privately held business owners, corporate executives, hedge fund managers and private equity executives, real estate owners, entrepreneurs, and successful physicians – all working with specialized life insurance advisors in conjunction with insurance carriers that have developed products tailored to the strategy.

To date, there has not been a trust company that specialized in life insurance, including premium financed policies – but now there is.  ITM TwentyFirst, the largest manager of life insurance for trustees and institutions nationwide, has created an affiliated South Dakota-based trust company that focuses exclusively on life insurance. Though the trust company does not provide any financing themselves, it does provide the premium financing market with a logical option for housing premium financed policies.

South Dakota has long been a superior trust situs – ranked as one of the best places to house a trust in the US year after year by leading trust and estate planning publications. South Dakota has the lowest insurance premium tax of any state – 8 basis points.  It prides itself on client confidentiality and does not require trust documents to be filed publicly.  The legislators are cooperative and proactive toward trusts and have levied no state income taxes on trust assets, and state legal statutes allow for the trust creators to direct the trust company to follow the investment decisions of an outside advisor, making the life insurance professional part of the process.

The Life Insurance Trust Company is the perfect company to work with.  Started as an affiliated company of one of the country’s most highly regarded life insurance policy managers, the firm focuses exclusively on life insurance, with no eye toward acquiring other assets.  By utilizing the services of its parent company, the trust company provides expert trust administrators and life insurance specialists that work daily with tens of thousands of policies – this is not a side asset for the company – it is their daily work.  And it shows in the level of services provided.

The staff at Life Insurance Trust Company knows the trust business and understands the life insurance business – many come from that industry.  It is extremely advisor friendly and will work with you to ensure that your clients and their beneficiaries maximize the value of the policy in their trust.

Premium financing is a specialized strategy.  It just makes sense that you partner with a specialized company skilled in the management of life insurance as an asset class.   For more information, contact Leon Wessels, Corporate Business Development Manager, at 605.574.1703 or lwessels@lifeinsurancetrustco.com.