Have Your Cake and Eat It Too Part 1


Affluent people like to save money

It’s ironic that affluent people who can best afford our suggested coverage and can benefit most but don’t want to spend the money on premiums.   

Have you ever had a prospect who you knew could afford the large premium you were presenting?

We all know them……

  • Who is in their 50’s or older
  • Has substantial wealth.
  • Is a control person.
  • Who may or may not be sophisticated.
  • Who hates paying more tax than they have to.
  • Who knows that even without planning their family may be set financially.
  • Could be single or married.
  • Is making good money and has enough that they can create an investment that isn’t like in and out of a checking account.
  • Realizes that the value of having any of their investments tax favored.
  • That may or may not have created available funds or policies for any family’s future care needs.
  • Term insurance buyer.

Why don’t these individuals buy higher prices permanent solutions?  Here are some reasons why:

  • They want flexibility and realize if they “gift” to a trust, they can’t get it back.
  • They think they can do better with their money.
  • They may want some of the money for retirement.
  • They may have other gifts to give such as appreciated stocks, or property, and don’t want to use up their gifting with life insurance premiums only.
  • They may not trust beneficiaries to grow up and be responsible. 
  • They don’t believe in permanent insurance.
  • They need to minimize their gifts as they may have used most or all their unified credit already.

These are the same people who are so frugal that if there was an extremely competitive term policy that they could keep for their lifetime they would be more inclined to purchase!  YES?  Now there are plans that your client can have the most competitive 1-year re-entry term for life if so desired.  No economic benefit costs if, it is lower than $17,000/beneficiary there are no gift tax forms to fill out, nor are there any taxes due.   

Your prospect can now leverage his or her dollar, get substantial insurance, and have immediate access to over 95% of the premium.  Premium dollars become flexible and tax-free growth and a potential tax-free income.  HOW?  Private Split Dollar.  The effects of Private Split Dollar, the control freak who made all the money, OWNS the Cash while, the trust rents or is deemed to rent most of the insurance.  The Private Split Dollar allows flexible arrangements and possibilities for the future as well as leveraged gifting of substantial worth with little economic expense.  Other uses also include:A partner who needs the death benefit on the other but is not as economically well off as the partner. 

A child marries a soon-to-be professional, who is in school or just starting out and the parents want to lend money to the professional to protect their family. 


The Cake

  1. Never Pay Taxes While Living.
  2. Federal Income Tax Free Death benefit.
  3. Substantial Tax-Free Income Available.
  4. Substantial part of the death benefit not included for federal estate tax purposes.
  5. Substantial opportunity to make money tax free.
  6. If by chance needs care tax free funds, they are available.
  7. If one gets sick and needs extended care, it is available.

Eating It as Well

  • The owner has access to the cash values during lifetime*
  • The Owner is protected against LTC.
  • The owner can get a substantial tax- free income in the future.
  • If the owner’s plans end prematurely, the family can have substantial tax- free cash.