Premium Finance Review & Rescue

Don’t Wait Until It’s Too Late – Verify your policy’s performance, don’t just assume.

When it comes to premium financed life insurance, few areas are as complex—or as potentially dangerous—if not properly designed, stress-tested, and reviewed by an independent licensed life insurance analyst. At LifeInsuranceReview.com (LIR), we specialize in helping both consumers and professionals evaluate, rescue, and restructure premium finance strategies that may not be living up to their promises.

For many clients, premium finance is marketed as an attractive way to fund large Index Universal Life (IUL) policies for estate planning or wealth transfer. But beneath the glossy illustrations and optimistic projections lies a harsh reality: most policies are based on assumptions built on other assumptions, and they can quickly unravel if not designed and monitored with extreme care.

The Three Most Common Mistakes in Premium Finance

1. Not Fully Understanding Complex Designs & Stress TestingMany agents and brokers promoting premium finance IUL policies know how to manipulate the illustrations to showcase attractive outcomes. Yet, those outcomes are rarely guaranteed. Every projection is based on moving variables—caps, participation rates, crediting strategies, and loan costs. Without thorough stress testing under different scenarios, clients may be blindsided by poor performance.

2. Trusting Policy Performance Without Considering Annual ChangesIULs are not static contracts. Each year, rates, caps, and participation formulas can change. At the same time, the cost of insurance (COI) typically increases as the insured ages. The combination of declining crediting rates and rising COIs can quickly destroy policy values, especially when premiums are financed.

3. Misunderstanding Interest Rate VolatilityInterest rates play a double role in premium finance. They determine the cost of the premium loan itself and influence the long-term performance of the policy’s indexed cash values. When borrowing costs rise—even by small margins—loan obligations can exceed policy growth, creating dangerous shortfalls.

Why Premium Finance Rescue Matters

Premium financed life insurance is not just “complicated”—it is highly specialized. At LIR, we routinely review cases where policies were sold by agents who lacked the depth of knowledge needed to design and manage them. Unfortunately, these poorly structured cases often collapse under even minor performance disappointments.

Key areas we focus on include:

• Loan structuring (terms, rates, renewal risk)

• Collateral management (outside gap collateral exposure)

• Borrowing rate changes (how rising interest costs erode viability)

• Indexed policy returns (realistic vs. illustrated outcomes)

On average, many in-force financed IUL policies underperform by 20–40% compared to their original illustration after just 3–4 years.

Rescue & Solutions: Stopping the Bleeding

The good news is that solutions exist. Our role at LIR is to help clients:

• Review and stress test their in-force premium finance arrangements.

• Identify exit strategies that stop unnecessary financial bleeding.

• Restructure coverage into more sustainable, low-cost life insurance solutions for estate planning.

While every case is unique, the earlier a client seeks a Premium Finance Review & Rescue, the more options are available.

Why Work with LifeInsuranceReview.com (LIR)?

• Licensed Life Insurance Analyst – Fewer than 1% of licensed professionals in California hold this designation, which is fiduciary in nature and consumer-focused.

• Independent, Fee-Based Reviews – We are not tied to commissions or bonuses. Our only responsibility is to protect the client.

• Proven 28-Point Policy Review – Our proprietary checklist ensures that every aspect of the loan, policy, and design is carefully examined.

By partnering with LIR, both consumers and professional advisors (CPAs, estate attorneys, RIAs) gain a trusted ally to protect clients from hidden risks and safeguard their financial plans.

FAQs: Premium Finance Review & Rescue

1. What is premium financed life insurance?

Premium finance involves borrowing money—usually from a bank—to pay life insurance premiums on large policies, often IULs. The strategy is designed for wealthy clients but carries significant risks if not structured and monitored correctly.

2. Why do premium finance policies fail?

They fail when loan interest costs outpace policy growth, when assumptions in the original illustration do not materialize, or when collateral requirements become unmanageable.

3. How often should a premium finance policy be reviewed?

At least annually. In reality, quarterly or semi-annual checkups are best, especially during periods of interest rate volatility or declining policy crediting rates.

4. What does a Premium Finance Rescue involve?

Rescue strategies include policy restructuring, loan renegotiation, collateral reduction, or policy exits while ensuring affordable ongoing coverage for estate planning needs.

5. Can professionals refer clients to LIR for a second opinion?

Absolutely. We routinely partner with CPAs, attorneys, RIAs, and family offices who want a fiduciary review for their clients before problems escalate.

6. What happens if my premium finance policy is already underperforming?

It’s not too late. Even if the policy is already off-track, we can help mitigate losses, restructure funding, or create an orderly exit strategy that minimizes financial damage.

Final Word: Don’t Wait Until It’s Too Late

Premium finance can work in the right circumstances—but only with expert oversight and ongoing review. Without it, clients risk losing not just the life insurance policy, but also their financial stability.

Whether you’re a consumer worried about your own policy or a professional advisor seeking to protect your client, a Premium Finance Review & Rescue through LifeInsuranceReview.com (LIR) is the responsible step forward.