The basics of premium financing are:

a HNWI may settle an irrevocable life insurance trust (ILIT) or may utilise an investment holding company – to act as borrower, policy owner and policy beneficiary (Borrower);

a lender bank (Bank) provides premium loan financing to the Borrower;

the Borrower utilises the loan to purchase a life insurance policy (Policy) from a life insurance carrier (Insurer);

there may be an arrangement between the Insurer and the Bank whereby the policy premium may be held by the Bank and utilised by the Insurer for making investments. The Insurer and the Bank may enter into a discretionary management agreement in relation to these premiums; and

as security, at the very least, the Bank will require an assignment from the Borrower to its rights under the Policy in favour of the Bank.


Our recent experience has shown that premium financing is an exponentially growing financial technique. In the Asian market, which is undergoing a boom in the number of HNWIs, we have seen the largest growth. We work with a host of private banks based and operating in Asia that offer premium financing.

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