Finance

Business Owners Benefit from using Premium Finance

As compared to just paying out a death benefit Life insurance today. While the policyholder is alive ever before in history, these insurance policies offer a tremendous amount of living benefits.

The benefits of financing insurance premium of life insurance can be amazing for high net-worth individuals and business owners.

Tax-Free Income Stream

As tax-free withdrawals, the business owner can take out the money from their life insurance policy once the policy loan is paid back. Money taken out of the insurance policy is not subject to taxation by the IRS as it is considered a policy loan.

Usually, most individuals from their insurance policies can start taking out money in as little as 5 years.

Tax-Free Loan:

Made to companies and individuals who want to fund large amounts of tax-free cash value and purchase inside a life insurance policy Life insurance premium finance is a loan.

The money can be taken out as cash at a later date, tax-free and the individual or company receives can go directly into the life insurance policy as businesses do not pay income taxes on loans.

Business owners can write off on their taxes the loan interest In addition to tax-free loans and tax-free withdrawals. Insurance Financing in USA is very common.

No loss of Value

Unless to protect the policy owner from stock market losses the underlying life insurance vehicle has some type of guarantee the benefits as stated above are meaningless. By using an indexed universal insurance or whole life policy this is achieved.

As a minimum guarantee of 1% and the upside potential of 12-15% yearly cap is very attractive using an indexed universal life insurance policy is recommended.

Chronic and critical illness riders are offered by some indexed universal insurance policies. At no additional cost these riders are usually offered and in case of a medical situation, they can provide for additional income. While you are alive you can access up to 90% of the death benefit to use if you are ever terminally ill.

Protection of Assets

In most states, from creditors the cash value build up inside Ohio Finance Insurance and annuities is protected. These assets will not show up on any database that is connected with you personally if you are ever sued.

Also, covering cash value up to $250,000most states have a guarantee association. These protections will make sure that by law and risk the huge amounts of money you have inside of your life insurance policy are protected.

Creative Living Buyouts

With the reality that their buyers may not be able to find the financing, they are confronted when business owners decide it is time to sell their business. To some type of self-financing where they will help the new owner finance the purchase of the business most business owners will have to resort.

It does not matter if business is bad or good or if the new owner runs the business into the ground by using the premium financing method. There is nothing at all to worry about as with an appropriate method of financing you would have taken out your money.

Author’s Bio

Premiumfinanceassociates provide superior Insurance Financing USA and premium financing services for the casualty agent and property at an affordable cost. Visit www. premiumfinanceassociates.com

Leave a Comment