In a twist of irony, 2020 will be going down in history as the year no one saw coming. From Covid-19, shutdowns, store inventory shortages, high unemployment, wild market swings, trillion-dollar bailouts, to historically low interest rates, this year will change the future in ways we do not fully understand yet. However, one trend that has clearly emerged is a significant increase in new life insurance case activity. There has also been a significant increase in premium finance activity both for funding new life cases and for refinancing existing premium finance loans.
Premium finance has emerged as a power strategy that allows customers to efficiently fund their new life coverage and not disturb existing capital and investments. During challenging times, it is a natural reaction that many clients want to retain more of their assets given an uncertain future. Additionally, needing to liquidate an asset or investment at the wrong time can be a significant issue. Premium financing solves these issues by providing an external source of capital using historically low loan rates to fund their coverage. IUL contracts seem almost tailor-made for today’s volatile economic environment. The index strategies provide the safety of a floor along with significant upside potential. The combination of low loan rates, potential index strategy performance, and retained capital is allowing many affluent clients to move past the barriers of today’s environment and obtain their needed life coverage.
Existing premium finance cases and loans may no longer be meeting the client’s needs in these changing times. Restructuring a premium finance case with a new loan may be an excellent way to keep the design on track by matching lending terms with the client’s objectives. We are also seeing refinance cases where the old loan rates and conditions are no longer competitive. The team at Global One is able to quickly and efficiently structure a refinance loan and provide a preliminary rate in just days. To help advisors with the service of their premium finance cases, Global One is now offering a bonus payable to the agent submitting a loan for refinancing with another lender that successfully closes. The bonus percentage is 50 bps of the refinanced loan. For example, if we refinance a $10,000,000 loan, the agent receives a bonus of $50,000. Please refer to our Refinance Bonus Program brochure for the details and conditions.
The team of premium finance experts at Global Financial Distributors, can provide exceptional assistance with all your premium financing cases. From initial consultation and design, to helping provide the fastest loan underwriting and funding in the industry, to providing service and support after the sale, we partner with you to provide superior leveraged solutions for your customers. To see how we can help fund a new case or refinance an old loan, please contact your Financial Services Manager or call 800-515-2599.
Chris Layeux, MBA, CLU, ChFC
Senior Vice President