Daniel Wachs discusses Premium Finance
Listen to the interview on the Business Innovators Radio Network: https://businessinnovatorsradio.com/interview-with-daniel-wachs-with-perpetual-wealth-management-leveraging-premium-finance/
In this episode of Influential Entrepreneurs, Daniel Wachs, owner and founder of Perpetual Wealth Management, speaks about leveraging life insurance through Premium Finance, which is exclusively designed for high-net-worth individuals. Daniel shared his extensive background in the financial services industry, starting at Northwestern Mutual in 1995 and eventually becoming an independent broker specializing in Premium Finance strategies for the past 15 years.
He explained the concept of Premium Finance, which involves using third-party lenders to finance larger loans to pay insurance premiums on behalf of clients. This strategy is particularly suited for high-net-worth individuals, typically those with a net worth of around $5 million or more, due to the substantial premiums involved.
In the realm of financial services, Premium Financing has emerged as a sophisticated strategy that less than 2% of the population qualifies for. This approach allows these individuals to preserve their wealth and also enhances their financial strategies. As discussed in Dan’s 1st podcast, understanding the intricacies of Premium Financing can provide significant benefits that traditional financial strategies often overlook.
Premium Financing is a method whereby a high-net-worth individual uses a third-party lender to finance life insurance premiums on his or her behalf. The loans are secured against the cash value of the insurance policy. This strategy allows clients to reduce their outlay, so they can invest their capital to potentially yield more than the cost of the loan.
High net worth individuals often have access to investment opportunities that require significant capital. By utilizing Premium Financing, they can keep their capital invested in higher-yielding assets while still securing the benefits of a life insurance policy. This dual approach allows them to optimize their financial portfolio, enhancing both growth and protection.
Benefits of Premium Financing
- Retained Capital: One of the most significant advantages of Premium Financing is retained capital. By borrowing to pay premiums and paying a much smaller fee through interest, HNWIs can keep their money invested in their business or allocate their funds to alternative investments. This strategy not only maintains liquidity but also allows for more strategic investment opportunities.
- Tax Efficiency: Life insurance policies can provide tax advantages, including tax-free death benefits and tax-deferred cash value growth. When structured properly, Premium Financing can increase these benefits, allowing clients to optimize their tax strategies and potentially reduce their overall tax liabilities.
- Leverage: Premium Financing allows high net worth individuals to leverage their wealth. Clients may amplify their financial plan by paying interest rather than large premiums. This leverage can be particularly beneficial in estate planning, where the life insurance policy can provide liquidity to cover estate taxes, ensuring that more of the estate is passed on to heirs.
- Flexibility and Customization: As Daniel Wachs emphasized in the podcast, Premium Finance Specialists will tailor strategies to meet the unique needs of each client. This flexibility ensures that the chosen strategy aligns with the client’s overall financial plan, taking into account their specific goals and circumstances.
- Access to Better Rates: By working with multiple carriers and financial institutions, Premium Finance intermediaries can often secure better loan terms and interest rates for their clients. This competitive edge can further enhance the benefits of Premium Financing, making it a more attractive option for HNWIs.
The Premium Financing Concept is a powerful tool for high-net-worth individuals looking to enhance their financial strategies. By leveraging life insurance policies through borrowed funds, clients can preserve capital, optimize tax strategies, and maintain flexibility in their financial planning. As the financial landscape continues to evolve, Premium Financing offers a unique opportunity for affluent clients to navigate their wealth management in a way that aligns with their long-term goals. Understanding and implementing this strategy can lead to significant advantages, highlighting the importance of working with knowledgeable financial professionals who can provide tailored solutions to meet individual needs.
Daniel shared: “My job as a finance specialist is to make sure the policies are designed properly and to make sure the policies get funded and are performing to provide the benefits to the client and pay the lender back.”
Video Link: https://www.youtube.com/embed/MwfcBKYkH7k
About Daniel Wachs
Daniel has worked in the insurance and financial services business since 1995. He is the founder of Perpetual Wealth Management, LLC and the Perpetual Wealth System for Premium Financing transactions. Daniel’s business has been focused on Premium Financing for the last 15 years. Daniel is a National Vendor for Premium Finance Strategies, representing multiple life insurance carriers and finance lenders. Perpetual Wealth Management has funded over $2 Billion of Death Benefit and has over $750 million of funded and/or committed capital loans outstanding, with multiple finance lenders. Daniel works around the country with IMO’s, agents and HNW clients to implement these concepts. His main focuses entail Estate & Charitable Planning – Business Planning and Supplemental Income Planning. He has spoken at many industry events on the topic of Premium Financing. Daniel works and lives in Chicago with his wife, Anna Marie, and has three children, Isabelle, Alexandra, and Andrew.
If interested in learning more about Premium Financing and how these concepts can be implemented please book a no obligation 30-minute conversation with me.
Learn more: http://www.perpetualwm.com/
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