The Premium Finance Strategy with Mel Lieber

We’re back with the Ask The Planman podcast, and in Episode 52 get ready to unlock a whole new dimension of financial planning with our special guest, Mel Lieber, a seasoned premium finance specialist.

Understanding Premium Financing

Premium financing is like a shortcut in the complicated financial landscape. It’s a strategy designed to meet specific financial needs, particularly in estate tax and retirement planning.

Mel Lieber, with his wealth of experience, breaks down this concept into easy-to-understand tidbits. Imagine needing a substantial life insurance policy to cover estate taxes. Instead of draining your wallet, premium financing steps in, allowing a bank to cover these costs partially or fully. Later, you can withdraw from the policy, repay the loan, and still have a robust policy in place. It’s like having your cake and eating it too!

Also in this episode, we’ll dissect various premium financing strategies, their working principles, and how they can help you stretch your assets further – such as the concept of “cheap money.” Banks offer lower interest rates for loans that present low risk, and the insurance policy acts as a solid collateral, even more reliable than real estate. It’s a ‘cash collateral’ that can be liquidated swiftly, presenting less risk and hence, attracting lower interest rates from banks.

Inside the episode, we cover:

  • The concept of premium financing in life insurance and a strategy that allows people to finance a significant portion of their premiums instead of paying out of pocket
  • Two premium financing strategies – one aimed at individuals facing large estate taxes, and another for those seeking to maximize their investments
  • What can be used as collateral for premium financing, which can significantly assist clients with large estate taxes
  • The use of indexed annuities and indexed life insurance as methods to mitigate downside risk while enabling upside participation
  • The crucial role of financial advisors and estate planning attorneys in navigating these complex issues

Where to Listen:

Ready to dive in? Listen to the episode on your favorite streaming platform, including Spotify or Apple, and take the first step towards a better-organized and more prosperous financial future.