CAPITAL MAXIMIZATION STRATEGIES

Securing Your Legacy
Once you have achieved a certain level of success, your thoughts may shift towards securing your legacy. Life Insurance is an important asset that can help protect your loved ones or business partners from the financial impact of your premature death. Because you have more to protect, you may need more life insurance coverage. Paying the substantial premiums required for large life insurance policies may require you to sell assets such as real estate, equities, or bonds. Prevailing market conditions and tax consequences may impact the sale of these assets.
WHAT IF THERE WAS A WAY TO GET THE LIFE INSURANCE COVERAGE YOU NEED WITHOUT SACRIFICING THE ASSETS YOU WORKED SO HARD TO BUILD?


​harness the power of life insurance without liquidating assets


​What is the Capital Maximization Strategy?
The Capital Maximization Strategy (CMS) is an innovative premium financing strategy that provides you with the funds to pay your life insurance premiums without liquidating assets to cover the full premiums.

With CMS, you borrow funds at competitive interest rates to pay for your life insurance premiums. You collateral to secure the loan through the policy's cash value and other performing liquid assets. The policy death benefit is assigned to the lender to cover the outstanding loan balance in the event of death prior to the loan repayment. The remaining death benefit is paid to the beneficiaries. 
The CMS strategy can be used for:
  • Estate Planning
  • Business Continuation Planning
  • Potential Asset Accumulation
  • Asset Preotection

how does cms work?
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STEP 1:
You apply for Life insurance from an approved company and for a loan from a lender approved to finance the life insurance premiums.
STEP 3:
The lender approves the loan and pays the premiums to the insurance company to put the policy in force.
STEP 2:
You pledge collateral and make the interest payments to your lender.
Step 4:
At the death of the insured, the policy's beneficiaries receive the balance of the policy after payment of the loan.

​CONCLUSION:
​* Helps you increase financial flexibility by having 3rd party pay for your large premiums
* Minimizes up-front "out of pocket" expenses to secure life insurance coverage
* Saves your capital to use for other investments
* Tax-advantaged applications may occur on your withdraws

Scenario: how does premium financing work?


​JAMES, a successful business owner with a net worth of $10 million has worked years to grow his business and has accumulated significant wealth. He and his advisor determine he needs a $7 million life insurance policy. His portfolio is currently earning strong returns, so he does not want to withdraw money from it to fund the policy. Jame' advisor recommneds that he minimize his out-of-pocket costs by using CMS premium financing strategy to purchase the life insurance policy and arrange premium financing at an attractive loan rate.
  • James (Individual, Trust or Business) has a need for life large insurance policy or looking for a way to diversify assets.
  • James applies medically for a life insurance policy to be financed.
  • James then applies financially for a loan to finance the life insurance premiums after the approval from the life carrier.
  • The bank approves the loan and pays the premiums to the life insurance company.
  • Once approved, James assigns a smaller amount of assets as collateral to the bank and only pays the interest due on the premium payments made by the bank.
  • The bank is assigned as the beneficiary to cover the loan amount upon his death. Remaining balances will go to other beneficiaries that have been assigned by James.
  • James during his lifetime, now has preserved majority of his capital to use for other investments.


​is cms right for you?


Individuals, corporations, trusts, and partnerships with a need for life insurance, $5,000,000 in net worth and high income are eligible to apply for premium financing using the CMS program. Those between $1,00,000 to $4,999,999 can still be considered for very effective alternatives. Criteria and requirements vary by lender. In addition, you need to qualify both financially and medically for the life insurance policy. If prior health conditions may play a factor, there are other very effective alternatives.

Success is measured on how well you have planned


​Success is measured by more than numbers. Oakhills will continue to remain attuned to your family's unique and changing needs to develop, coordinate, and implement an integrated plan that creates a positive impact for generations. 

Learn how to maximize your assets
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