Premium Financing With Indexed Universal Life: Part IIPremium Financing With Indexed Universal Life: Part II

Premium financing can be an attractive strategy to fund indexed universal life (IUL) policies. Let’s examine the rewards of a premium financing plan, use a model to analyze IUL returns in relation to the underlying index fund returns, stress test an aggressive plan and the risks it poses and outline a prudent approach to designing, monitoring and managing a successful premium financing plan. I’ll close with a word of caution with issues from actual disputes involving premium financing plans based on attorney Richard L. Harris’ experience as a consultant and expert witness.

Rewards 

The rewards of premium financing are simple: It provides the opportunity to use other people’s money to fund an established need for life insurance. An establis...