Best (whole life) "cash value line of credit" program?

[Lloyds of Lubbock]

There a numerous companies that take whole life policies.
The interest rates in that market are not competitive.
If I had 250k in cash value and wanted a 50k loan a third party lender has to give me a great interest rate to assign them the whole policy.
That market is dead.
Even premium financing many of the brokers I know, when applicable are turning their loans back to the company.

 

[Tahoe Ray]

There a numerous companies that take whole life policies.
The interest rates in that market are not competitive.
If I had 250k in cash value and wanted a 50k loan a third party lender has to give me a great interest rate to assign them the whole policy.
That market is dead.
Even premium financing many of the brokers I know, when applicable are turning their loans back to the company.

The thread being started almost a year ago changes things.

As the wise philosopher Confusionus once said: Shit be cray, yo.

 

[Lloyds of Lubbock]

I used to live in Orlando.
There was a saying there.....if you don't like weather wait 15 minutes.
It will change.
It is always good to know what is out there, to help put your client in the best position.

 

[ejbarraza]

Are you looking for a cash value line of credit on an IUL.
They are few and far between.
The cash value based loans business is dead in the water right now.
Agent are taking 3rd party loans and giving them back to the carriers.

Hello do any of you know anyone at M & M bank? I've been unable to pinpoint their home office. My biz associate will be looking to issue the IUL from Ameritas.

I have an insurance-backed line of credit from M&M bank with 95% loan to value and quarterly interest-only. I will soon be cross-collateralizing my Pacific Life IULs and Ameritas IUL with an iBLOC from The Bancorp Bank. So they are not as few and far between as you think they are. In fact, The Bancorp has $713 million worth of iBLOCs on their balance sheet. Inclined's Brenda Newton (formerly head of The Bancorp Bank) has said that the long-term goal is to also add IULs to their iBLOC portal.

 

[KUtiss]

I really appreciate the responses. Now who is a good premium finance lender? I've started a nonprofit and my biz associate can donate the income he would make to our projects. The mission of our nonprofit is to assist in ending homelessness in America. So say like if someone wanted to buy real estate and say they have 25% down if he was to donate the income he makes it could go up to 75% down. Just depends on who is trying to set up everyone for win/win situations.

Currently we will be creating shares in a hotel. If one is to donate the amount for the unit thru us @ $60,000 per unit they will get the value of 2.5 which is $150,000 so if they make over $100,000 a year this puts them at a tax rate of 32% and saves them $48,000 so the investment only costs $12,000. The expected return on just section 8 income is 23% or $259,560.

 

[Lloyds of Lubbock]

Do you know anthing about premium financing?
What is the purpose of the insurance?
Loan rates are upward of 6%
How much collateral can your partner assign to the bank?
Who is putting together your term sheets?
Who is drawing up the trust?
What is your partners net worth?
Who is paying the interest, your partner or the business?
Banks don't love non profits.
My old office specialized in premium financing...that is pretty much all we did.
The interest rate will be predicated on the size of the loan and some banks will do a quick financial underwriting.
You may want to inquire if they do premium financing....that is where you will get the best rate.

 

[Allen Trent]

Currently we will be creating shares in a hotel. If one is to donate the amount for the unit thru us @ $60,000 per unit they will get the value of 2.5 which is $150,000 so if they make over $100,000 a year this puts them at a tax rate of 32% and saves them $48,000 so the investment only costs $12,000

These kinds of facts will likely be Exhibit A in the court case for fraud or misrepresentation. So, you are saying someone that "invests" $60,000 to be a shareholder in something gets a $48,000 offset on their taxes & thus only has $12,000 investment in the shares?

Dividends & capital gains dont necessarily get taxed at the same rates as ordinary income.

Real question-----if the money man in the example has so much money, why wouldnt he be the sole investor rather than all the hassle of unit share holders? Just out of the goodness of his heart that he wants others to be able to profit from the non-profit? why wouldnt he just make the homeless the shareholders so they can benefit?

Entirely possible my cynical view is clouding my understanding of this situation. Please post link to the non-profit & I might be interested in holding shares like this in my blind trust fund I use for speculation

 

[angeliquedelapava]

Hope everyone is having a great day. What's the best cash value line of credit (for whole life policies) program you are aware of? While "best" is a relative term, let me clarify -- what's the lowest rate you are aware of?

When I look at the various banks and their programs, I look at these items:
1) Interest rate (usually variable, and tied to WSJ Prime, so it's usually WSJ Prime minus ____ (fill in the blank)
2) Do they offer a fixed interest rate option?
3) What % of the cash value will the bank loan you via the line of credit (usually between 92% and 95%)?
4) Term of the line of credit (usually between 2 years and 5 years, before it renews)?
5) Payment options -- interest only, interest and principal?
6) Do they consider this non-recourse so that the line of credit does not appear on the borrower's credit report?

It should be an interesting exercise next time around for clients as the interest rate has gone up from 2.75% and 3% to now in the high 5's and low to mid 6's. Yes, and as many of you are already thinking -- compare that to the borrow rates on policy loans. Those could be 8, down to 6; maybe 7 down to 5; or even 6 down to 4, depending on the age of the insured, age of the policy, etc. Yes, direct recognition vs. non-direct will absolutely play into this too.

All that aside -- what's the best, most favorable program out there that you are aware of? Thank you in advance!

Hello the best alternative is call a agent from AAA Insurance . I always call a customer service agent for get the lowest price.

 

[LostDollar]

I used to live in Orlando.
There was a saying there.....if you don't like weather wait 15 minutes.
It will change.

Based on my experience in KS and the mountain country of TN, I think that may be a fairly universal saying.