Case Design Mode
Choose a structure that matches your client’s cash flow profile and exit strategy
Full Premium Finance Picture
All four lines — loan, cash value, total DB, and net DB
- Loan Balance
- Total Cash Value
- Total Death Benefit
- Net Death Benefit
Rate Sensitivity Analysis
How the net death benefit changes across three loan interest rate scenarios
| Scenario | Rate | Loan @ Retirement | Net DB @ Retirement | Net DB @ Age 90 | Leverage |
|---|---|---|---|---|---|
| Low Rate | 4.0% | $2.59M | $7.71M | $5.26M | 4.0× |
| Base Rate | 5.5% | $2.99M | $7.31M | $769K | 3.4× |
| Stress Rate | 7.5% | $3.61M | $6.69M | $-9.83M | 2.9× |
A third-party lender pays the $350,000/yr premium for 5 years. The client posts collateral (typically a letter of credit) and pays interest annually.
The whole life policy accumulates cash value and a growing death benefit via Paid-Up Additions. By retirement, the total death benefit reaches $10,296,957 —3.4× the outstanding loan.
At death or policy surrender, the outstanding loan of $2,989,253 is repaid from policy proceeds. The remaining $7,307,704 passes income-tax-free to heirs.
Premium finance is a sophisticated strategy suited for high-net-worth clients. Rising interest rates increase the loan balance faster than illustrated. If the policy's cash value falls below the loan balance, the lender may require additional collateral or force a policy surrender. Lender renewal risk (loan called at maturity) must be managed. This illustration is for educational purposes only and does not constitute financial advice.
Year-by-Year Snapshot
Key milestones across the policy timeline
| Age | Loan Balance | Total Cash Value | Net Equity | Annual OOP Cost | Total Death Benefit | Net Death Benefit | Leverage |
|---|---|---|---|---|---|---|---|
| 50 | $350,000 | $119,175 | -$230,825 | $19,250 | $9,308,137(+1%) | $8,958,137 | 26.6× |
| 55 | $1,750,000 | $1,211,999 | -$538,001 | $96,250 | $9,932,430(+8%) | $8,182,430 | 5.7× |
| 60 | $2,287,180 | $1,492,440 | -$794,740 | — | $10,096,879(+10%) | $7,809,699 | 4.4× |
| 65Retirement | $2,989,253 | $1,838,036 | -$1,151,217 | — | $10,296,957(+12%) | $7,307,704 | 3.4× |
| 70 | $3,906,834 | $2,263,985 | -$1,642,849 | — | $10,540,381(+15%) | $6,633,547 | 2.7× |
| 75 | $5,106,076 | $2,789,044 | -$2,317,032 | — | $10,836,545(+18%) | $5,730,469 | 2.1× |
| 80 | $6,673,437 | $3,436,367 | -$3,237,070 | — | $11,196,873(+22%) | $4,523,436 | 1.7× |
| 85 | $8,721,915 | $4,234,537 | -$4,487,378 | — | $11,635,267(+27%) | $2,913,352 | 1.3× |
| 90 | $11,399,194 | $5,218,846 | -$6,180,348 | — | $12,168,640(+33%) | $769,446 | 1.1× |