Premium Financing as a tax mitigation and maximized income strategy, allows families and business entities such as law partnerships and medical doctor clinic groups, more options and flexibility for succession planning, buy-sell agreement, and key man applications.
The premium financed and individualized nothing-out-of pocket design structured with low-interest Collateralized bank loans avoids using tax dollars that are not deductible to pay for buy-sell insurance premiums. See Plan Three.
Most business entities do choose to pay the insurance premiums as a non-deductible expense. The IRS does allow to deduct premiums for a buy-sell or life insurance for a business purpose.
However, the beneficiary will then have a huge tax liability and be required to pay tax on the millions of dollars that was received from that insurance. Taxes are either based on the premiums paid or on the value of benefits received.
Nevertheless, depending on the clients objectives and individual circumstances the INTEREST for PREMIUM FINANCING can a deductible business expense.
If the Client does Chose to Pay a Portion of the Interest on the Bank Loan this will Significantly Increase the Policies Cash Value and the Legacy.
A NO-COLLATERAL DESIGN is also available. SEE PLAN ONE and PLAN TWO
The legacy for both no-collateral or the collateralized buy-sell contract is tax-free.
This is not a traditional Buy-Sell agreement. A 1035 Exchange can be utilized if a Buy-Sell is already in place. Our Buy-Sell Strategy is one of the most well-designed and comprehensive solutions on the market for eligible clients.