ABIL
HOW IS LEVERPOINT’S ABIL SUPERIOR TO PREMIUM FINANCE (OR FINANCED INSURANCE)?
At its simplest level, premium finance is using lender money to pay for life insurance premiums instead of using your own cash. The concept has been in use since the 1960s.
WHAT ARE THE BENEFITS OF PREMIUM FINANCE?
- Saves cash flow vs. using your own money
- Avoids opportunity cost (lost earnings or taking a working asset, liquidating it and using the money to pay for premiums)
- In estate planning applications it should reduce gift taxes
WHAT IS THE DIFFERENCE BETWEEN PREMIUM FINANCE AND LEVERPOINT’S ASSET BACKED INSURANCE LENDING (ABIL)?
ABIL is a variation of premium finance, where the primary focus of the design is long term durability against harsh economic conditions. It is LeverPoint’s contention that most financed insurance will only save clients’ money in the short term and if the conditions are normal. By contrast, LeverPoint’s solutions anticipate harsh economic conditions and are designed to save money over the client’s life.
Financing should only be used if it will make you money. Other alternatives are paying the premiums out of pocket or not purchasing insurance at all and paying the tax or expense out of pocket.
BENEFITS OF ABIL
- Greater retirement income
- Greater wealth accumulation
- More effective transfer of assets to heirs
- More effective equalization of inheritance
ABIL BUSINESS APPLICATIONS
- Golden handcuffs for key employees
- Golden parachutes for key employees
- Special retirement funding for key employees
- More effective buy/sell arrangement