 Minimum net worth of $10M+ |
 Exclusively referral-based |
 Substantial assets or cash flow |
 Need for significant life insurance coverage |
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The measure of all successful advisor-to-client relationships is the ability to find growth opportunities, while simultaneously preserving and protecting wealth. This is especially important for expansive portfolios that include unique asset classes and multi-generational investments.
We believe that life insurance is about more than protection. When combined with Premium Financing, high-value insurance coverage becomes part of a tax strategy that minimizes impact on allocated resources and maximizes cost efficiencies, including estate taxation.
Premium Financing Life Insurance is a powerful tool for the right planning scenarios. Experienced advisors engage our team to introduce their high-net-worth clients to the concept of premium finance and gain exclusive access to our case modeling + servicing.
Our ideal clients are familiar with the wealth-creating power of leverage. By using existing assets to borrow from a trusted lender, individuals and families are able to access significant benefits, including: Estate Preservation, Tax Efficiency, Retained Capital, Simplicity.
Address common needs and priorities, including: Assisting with the transfer of wealth from one generation to the next with a lower cash outlay, maintaining estate liquidity to pay taxes, settle debts and fulfill bequests upon death, and replacing wealth that might be lost to estate and gift taxes when used in conjunction with an irrevocable life insurance trust.
By paying interest instead of premiums, and structuring ownership of the life insurance properly, our clients can minimize their gift and estate taxes. Premium financing can help them use more of their annual gifting exclusions rather than tapping prematurely into lifetime exemptions. And, if structured properly, life insurance proceeds can be tax-free, maximizing the after-tax returns for the estate/beneficiaries.
Many high-net-worth clients earn double-digit returns on their wealth, be it in their business, real estate or the stock market. Instead of redirecting assets to pay for large life insurance premiums, premium finance allows them to retain more of that capital and keep it working in high returning asset classes
An irrevocable trust funded with life insurance can mitigate the need for complex, time-consuming, and costly asset sales by replacing wealth lost through estate taxes and fees.
Interest Rates
When interest rates are floating, the costs can go up in a rising rate environment.
By acquiring rate caps, swaps or entering into a fixed rate arrangement, we can mitigate these risks.
Policy Performance
In a permanent whole life contract, performance is driven by dividends. While dividends are not guaranteed, by using a major mutual carrier with a strong track record and balance sheet, we can mitigate much of this risk.
Collateral Risk
When posting cash, we risk erosion of the purchasing power of the cash to inflation. When posting securities, there is the risk of market volatility, potentially leading to a margin call. Careful design and management of a sinking fund should be implemented and is at the core of every design.
Exit Timing
When using policy cash values or outside assets, the performance of each may drive when to repay the bank loan. Given the formula for wealth involves time, capital, and a rate of return, shortfall in any one area may require an increase in another. Typically an exit between fourteen and eighteen years from inception is a good conservative benchmark.
Admittedly, we’re conservative by nature and make recommendations only when our ideas align with systematized data that confirms our expectations.
The appearance of our role in client relationships varies. Much of the time, we’re in direct contact with advisors and their clients, answering questions and leading conversations from concept through plan management. In other relationships, we’re a quiet partner, responsible for steering the process and providing guidance through advisory engagements.
It’s important to note that as a fiduciary, we maintain full transparency throughout the planning, implementation, and servicing phases of our work. The clients’ needs always come first.
Madan + Associates is a referral-based advisory practice. We work exclusively through a network of trusted financial advisors and select investors.
Prospective clients are evaluated based on specific criteria, including current holdings + assets, liquidity, income, health, risk tolerance, investment profile, and objectives.
E: info@madanfinance.com | T: 732.406.7524 | F: 631.240.4313
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