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    Estate Planning and Insurance: Does Premium Financing Make Sense?

    by Peter Katt

    Financing permanent life insurance premiums through third-party lenders is a marketing idea that promises to relieve individuals of having to pay their life insurance premiums.

    Typically, this idea is targeted toward those individuals who are buying life insurance that is associated with their estate planning: They have substantial assets and are probably in their 60s or older. The life insurance policies are almost always owned by irrevocable trusts or similar entities, and the financing arrangements are negotiated with lending institutions by either the insurance marketers or the individuals purchasing the policy.

    According to some of the major marketers, there are two primary reasons to consider premium financing:

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