Why Premium Financing Makes Sense for High-Net-Worth Entrepreneurs

For entrepreneurs running businesses with $10M or more in revenue, the question isn't whether to carry life insurance — it's how to structure it efficiently.

Premium financing lets you secure substantial coverage without liquidating investments or diverting operating capital. A lender pays the insurance premium on your behalf; you pledge collateral and pay interest on the loan. The arbitrage works when your investment returns exceed borrowing costs.

## Who it suits

Premium financing is most appropriate for entrepreneurs who:

- Have a clear need for significant life insurance (estate planning, key-person, buy-sell)
- Hold appreciating assets they'd prefer not to liquidate
- Have a relationship with a lender and can meet collateral requirements
- Are working with an advisor who can monitor the arrangement annually

## The risks to understand

Collateral calls, rising interest rates, and policy underperformance can all erode the economics. This is not a set-and-forget strategy. Annual review with your advisor and lender is essential.

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*This article is for informational purposes only and does not constitute financial or insurance advice. Speak with your JBIS advisor to discuss whether premium financing is appropriate for your situation.*