Financial Planners and Agents

Leveraged Life Insurance

I$LAND is Agency of America, Inc’s proprietary blend of life insurance premium finance, product, sourcing, and method. 

Premium finance started in Property and Casualty (“P&C”) insurance in “Olde England”.  When a ship owner planned a voyage around the Horn, he needed insurance.  The proposed insurance was posted at the pub, and wealthy individuals would sign their names underneath (as “underwriters”), agreeing to pay part of the loss if the ship sank.  The Owner had to pay the premium up front to all those underwriters, but the voyage would not make money until it got back.  So, the Owner borrowed the premium from his bank, until the ship returned.  Then, he repaid the premium loan with part of the profit from the voyage.


In the late nineteenth century, someone had the idea of using that same technique with life insurance policies.  The earliest case we have heard of was in 1893.  Until about thirty years ago, the minimums were very high, so it was reserved for the super-rich.  Now, we can write policies as small as One Hundred Thousand Dollars premium input.


Some Frequently Asked Questions:


FAQ 1:What’s in it for the lender?  Why would they do it? Answer: interest, plain and simple.  It is a large, long-term, secure, simple, low-hassle loan – all the things that lenders seek.  The ultimate repayment comes from a highly rated insurance company, not the client.  The longer the client lives, the more interest the lender will earn.  I$LAND reduces risk and cost for the lender, so the interest rate can be lower.  The lender does not worry about windstorm, termites, client losing his job, etc.


FAQ 2:  What’s in it for the insurance company?  Well, the insurer gets a policy that will be on their books for as long as the client lives.  They don’t have to worry about lapsing (non-payment of premium), and they don’t have to worry about someone replacing their policy.  They take their usual underwriting risk.  I$LAND™ reduces risk for the insurer.


FAQ 3:  What’s in it for the YOU?  You -the client- are the really big winner, by reducing the risk: 1) of death without all the coverage needed; 2) that the client’s estate outgrows coverage, producing one more bad IRS story; 3) that health deteriorates and client becomes uninsurable, or the insurance may become too expensive; 4) of premature taxation on assets sold to buy needed coverage; 5) of opportunity costs – avoided because the client’s capital and lines of credit are preserved intact; 6) of lifestyle changes due to cash flow curtailment.  Instead of large premiums the cost of an I$LAND™ plan is low and affordable. 

You also get 7) estate maximization –estate is immediately much larger, with little outlay;  8) tax-free (not “tax-deferred”) retirement income in the years past the “Zero Point”; and when the client passes away,  9) the net death benefit goes to beneficiaries income tax free.


I$LAND™, and premium finance generally, works like this:  a lender pays the premium to the insurance company.  The lender’s collateral is the policy and additional collateral posted by the client, such as  a letter of credit or a CD.  If the client dies, the policy repays the loan, and the balance goes to the beneficiaries.   After the “Zero Point”, the Client may withdraw cash from the policy and repay the loan.  The Zero Point is the point in time when the cash value exceeds the loan balance, including accrued interest.


I$LAND™ works the same way you might buy a business.  If you were to buy a business, you would probably have your bank put up the money.  The new business would pay back the loan, and you would still have the business.  I$LAND™ can work the same way for life insurance.


We deal with insurance carriers rated “A” or better, such as A+ or A++.  Our funding affiliates are large, reputable, and backed by major banks and other money sources. 


There is no free lunch, and in all I$LAND™ cases, the client must have some “skin in the game”.  However, in many cases, the only "skin" is the pledge of the policy itself as collateral for the loan.   Although I$LAND is not a “free lunch”, it can be a less expensive lunch.  The premium for the policy is still the same, but you use leverage to pay the premium.


The real engine that allows I$LAND™ to work is this: 

because the loan is so secure, the interest rate can be lower than the rate at which money builds up inside the policy.   And, the money in the policy is building up tax-free, and compounded.


In the final analysis, with I$LAND, everyone wins.  The risk for everyone is lessened.  Therefore, there is economic value for everyone. 


I$LAND– from AOA

The Smarter-Math Life Insurance Leverage,

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