Why the super wealthy may want to fund life insurance with a loan

June 23, 2018 by Greg Iacurci

Wealthy clients looking to use life insurance in their estate plans may find that funding their policies with a loan makes sense, especially as interest rates are still relatively low.

The goal is to exploit low interest rates to get a cheap loan, which funds premium payments for a cash-value life insurance policy such as whole or universal life. If the rate of return on the insurance policy exceeds the loan’s interest rate over the life of the contract, the client comes out ahead.

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Originally Posted at InvestmentNews on June 22, 2018 by Greg Iacurci.