Smart Planning for Life Insurance Funding
Life insurance is a vital tool, offering you and your loved ones financial protection and a way to transfer wealth to beneficiaries, potentially free of federal estate tax. However, securing the necessary level of insurance often requires individuals to liquidate appreciating assets to cover the premiums.Why Consider Premium Financing?
In the right circumstances, financing your life insurance premium can offer a better rate of return than paying your premium out of pocket.
By strategically borrowing funds at a competitive interest rate to cover your premium, you can minimize the need to liquidate assets. If those assets perform more favorably than the interest rate charged on the loan, the after-tax cash flow can be deployed elsewhere.
Benefits of Financing Your Life Insurance Premium
Financing your premium through Ameris Bank | Life Premium Finance may help you achieve several key financial objectives:
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Retain CapitalAvoid liquidating potentially appreciating assets in your existing portfolio. |
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Reduce Exposure to Income or Capital Gains TaxesLiquidated assets may trigger income or capital gains taxes. Borrowing funds to pay premiums may help defer the recognition of taxable gains on appreciated assets until they can be disposed of in a tax-advantaged transaction or at death, provided a step-up in basis is available. |
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All loans subject to credit approval. Not a deposit product or other obligation of, or guaranteed, by the bank or an affiliate of the bank. Not insured by the FDIC or any agency of the U.S. government, the bank, or an affiliate of the bank. Investment products may lose value. Ameris Bank does not provide tax or legal advice. Each individual’s tax and financial situation is unique. You should consult your tax or legal advisor for advice and information concerning your particular situation.