Case Study - Estate Planning

Olympic Gold Medalist, 25

Needs a reliable stream of income during retirement and a significant death benefit to insure the financial stability of the client’s heirs.

Leveraged Planning®

The Leveraged Planning strategy entailed the use of the client’s corporate entity as the borrower in a $1,000,000 loan transaction through GFD. The proceeds of the loan were used to fund the seven required premiums on a life insurance policy, the face value of which was over $6,000,000 (see details below).

The loan interest was paid by the borrowing corporate entity while the client was named as the owner of the policy. Loan payoff was planned to be made using non-policy funds. At the age of 65, the insurance illustration projects that the client will have sufficient cash value in the policy to begin taking distributions of over $300,000 per year until age 100, at which time, the policy is projected to still have over $8,000,000 in death benefit remaining. 

  • Initial Face Amount: $16,031,700
  • Total premium loan amount: $1,000,000
  • Loan interest rate: 4.85%
  • Policy Crediting Rate: 7.5%
  • Premium Payments: 7
  • Age Distributions Begin: 65
  • Annual Distribution Amount: $300,000
  • Years of Distributions: 35
  • Death Benefit at age 100: $8,635,000