AlTERMative Strategies Delivers Permanent Life Insurance at Term-Like Outlays

Partial Premium Finance Design Beats the Competition

AlTERMative Strategies is a new suite of partial premium finance permanent life insurance solutions for affluent clients. All plans provide permanent life insurance at term-like outlays.

While premium financing has been promoted for larger life insurance transactions over the last several years, the strategy has not gained widespread acceptance within the financial planning community due to the large loans associated with traditional premium finance plans. Traditional premium finance designs feature loans that grow to become 25% to 50% of the death benefit, causing the interest rate sensitivity to be unacceptable to many clients.
AlTERMative Strategies uses a design that allows the loan size to be a modest 3.5% to 7.5% of the policy face amount, reducing to zero over 15 years. The unique structure delivers control to the client with the least possible interest rate sensitivity.

“Most advisors fear that when interest rates increase, a premium finance plan design will be compromised by higher client outlays in the future,” says Bryan Setzler, creator of alTERMative. The alTERMative strategies are the simplest, most innovative structure to deliver permanent insurance at term-like pricing.”

The AlTERMative Strategies feature one modest loan that is anticipated to be fully repaid by the client over a 15 year period of time. During years 2 thru 15, the client pays a small supplemental premium. This simple design of one loan combined with a supplemental premium allows the client outlay to be very close to the price of term life insurance, with all of the benefits of permanent insurance. The design is not nearly as interest rate sensitive as normal premium finance plan designs since the loan is a principle and interest loan fully paid over 15 years. Policy cash values are generally high enough to exit the strategy as early as year 7 in the event the client no longer needs the coverage.

AlTERMative 15 solves the term renewal problem for clients 60 and above. Term insurance for older clients does not make sense due to the outrageous renewal premiums after the initial term period. Clients who grow older than the term policy maximum conversion age will have no option to keep the coverage after the initial term period. Clients that live into their 70’s will outlive their term policies, and will be forced to cancel their coverage just when they need the coverage the most. AlTERMative 15 allows the client the option of keeping their policy after the first 15 years with no proof of insurability.

AlTermative 30 allows affluent clients ages 45 to 60 own permanent life insurance at an outlay very close to 30 year term. Unlike term insurance, AlTERMative 30 accrues cash values that give the client tremendous flexibility and control over the policy. If the client decides they no longer need the coverage, they can cancel AlTERMative 30 and receive the cash value in excess of the loan balance. At the end of 30 years, the client will have the option of keeping the coverage with no proof of insurability.

AlTERMative Survivor establishes permanent survivor life at an outlay 70% below a normal level premium survivor life policy design. Once the client is in their mid-80’s, the premium increases to a new level amount. Often, the increased premium can be paid from the savings derived during the first 12 to 18 years. AlTERMative Survivor is available for clients with a net worth of $ 2.5 Million and above.

AlTERMative Strategies will be distributed by independent financial advisors nationwide. Call for a representative in your area.