DEATH BENEFIT LINE OF CREDIT

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Calling all policy holders, trustees, financial, legal and other estate planning advisors...

Best Ideas Group, Inc. (BIG) can now refer to a lender which will provide a non-traditional line of credit secured only by life insurance policies.

• Insureds can keep their policies and receive a non-recourse line of credit to pay current or even new premiums, receive cash advances, and to pay legal and accounting fees—all without outside collateral.

The ideal candidate fits these basic parameters:

• Minimum face value $500K or a few policies totaling $500K.
• Minimum age over 65.
• Younger candidates (and even smaller policies) can qualify if serious health conditions exist.
• Issued at standard or preferred rates.
• Any type of insurance where cost of insurance increases every year (typically universal life, variable life, and guaranteed universal life as well).

How is the BIG arranged line of credit so different from traditional premium financing?

• This unique line of credit transfers longevity (mortality) risk and the risk of the escalating cost of insurance from the policy owner to the lender, which we think you will agree, traditional lenders would normally reject outright.

Life insurance policy owners who seek additional liquidity and wish to keep their policies now have a third option with BIG.

Option 1 – Surrender

Surrender the policy to the life insurance company for its CSV.

Option 2 - Sell

Sell the policy on the life settlement market and receive a higher price than its CSV, but multiple intermediaries’ fees reduce payment to the policy owner.

Option 3 – BIG Arranged Transaction

Without selling or surrendering your policy, you can keep your policy and receive either an immediate non-recourse loan or a standby line of credit commitment for up to a 3 year draw down option with only the future life insurance death benefit as the only collateral on a “use it or lose it” basis. 

This is renewable every 3 years including full insurance underwriting each time and a one time origination fee based on the size of the loan which can be rolled up, again on a non-recourse basis. A good analogy for comparison would be a home equity line of credit, or possibly even better, a reverse mortgage.

What other services can BIG arrange on behalf of trustees and individuals to optimize their policies as investments and estate planning tools?

• BIG can arrange for the use of a proprietary method to gauge mortality underwriting and life expectancy projections which are the cornerstones of managing life insurance policies as investments and estate planning tools.