--- title: "Premium Financing Made Easy: A New Turn-Key Strategy" description: "Premium Financing Made Easy. Check out our new turn-key premium financing strategy: R-Squared. It offers no additional collateral with less complications" image: https://blog.advisors-resource.com/hubfs/Premium-Financing-Made-Easy.jpg --- [Skip to content](https://blog.advisors-resource.com/blog/premium-financing-made-easy-a-new-turn-key-strategy#main-content) ![advisors-resource-company-logo-horizontal-full-color-green-1](https://blog.advisors-resource.com/hs-fs/hubfs/advisors-resource-company-logo-horizontal-full-color-green-1.png?width=150&height=65&name=advisors-resource-company-logo-horizontal-full-color-green-1.png) - [Home](https://advisors-resource.com/) - [Who we Serve](https://advisors-resource.com/who-we-serve/) Show submenu for Who we Serve - [CPAs](https://advisors-resource.com/cpas/) - [Business Owners](https://advisors-resource.com/business-owners/) - [Financial Professionals](https://advisors-resource.com/financial-professionals/) - [Webinars & Blogs](https://advisors-resource.com/webinars-case-studies/) Show submenu for Webinars & Blogs - [Our Blog: Industry Insider](https://blog.advisors-resource.com/blog) - [Webinars](https://advisors-resource.com/webinars-case-studies/) - [Contact](https://advisors-resource.com/contact-us/) Open main navigation Close main navigation - [Home](https://advisors-resource.com/) - [Who we Serve](https://advisors-resource.com/who-we-serve/) Show submenu for Who we Serve - [CPAs](https://advisors-resource.com/cpas/) - [Business Owners](https://advisors-resource.com/business-owners/) - [Financial Professionals](https://advisors-resource.com/financial-professionals/) - [Webinars & Blogs](https://advisors-resource.com/webinars-case-studies/) Show submenu for Webinars & Blogs - [Our Blog: Industry Insider](https://blog.advisors-resource.com/blog) - [Webinars](https://advisors-resource.com/webinars-case-studies/) - [Contact](https://advisors-resource.com/contact-us/) Oct 20, 2021 11:05:23 AM # Premium Financing Made Easy: A New Turn-Key Strategy [Travis Pence](https://blog.advisors-resource.com/blog/author/travis-pence) Share: [facebook-f icon](http://www.facebook.com/share.php?u=https://blog.advisors-resource.com/blog/premium-financing-made-easy-a-new-turn-key-strategy) [linkedin-in icon](http://www.linkedin.com/shareArticle?mini=true&url=https://blog.advisors-resource.com/blog/premium-financing-made-easy-a-new-turn-key-strategy) [Twitter icon](https://twitter.com/intent/tweet?url=https://blog.advisors-resource.com/blog/premium-financing-made-easy-a-new-turn-key-strategy) [pinterest-p icon](http://pinterest.com/pin/create/link/?url=https://blog.advisors-resource.com/blog/premium-financing-made-easy-a-new-turn-key-strategy) [envelope icon](mailto:?body=https://blog.advisors-resource.com/blog/premium-financing-made-easy-a-new-turn-key-strategy) Why would someone want to utilize a premium financing strategy? Premium financing is typically most beneficial to high-net-worth individuals or business owners. Premium Financing allows these people to obtain life insurance with a large face amount and higher cash value without dramatically impacting their cash flow and/or liquidating investments to pay for it. Premiums for a high face amount can cost hundreds of thousands of dollars a year. While the client may be worth significantly more than that, they may not have enough liquid capital available to pay such high premiums and may not be willing to liquidate assets to raise the necessary capital. Premium financing allows them to attain sufficient insurance while keeping their assets intact. Many high-net-worth individuals need life insurance to address legacy planning, business continuation, and tax issues. However, many of these individuals may find themselves in a cash-flow deficit while they still need liquid funds for other purposes and investments. For high-net-worth individuals to continue to grow and protect their wealth, they need to take advantage of leverage. By taking advantage of the low cost of capital, they can optimize their own cash flow while securing the life insurance they need for their family and/or business. ### Complications with Premium Financing You may be wondering: “That sounds great! So, what’s the catch?” The main push-back that many individuals have with premium financing is the additional collateral and complicated nature of this type of strategy. Premium financing involves the lending of funds to a person, company, or trust to pay an insurance premium. Premium finance loans are often provided by a third party, typically a bank, at a certain interest rate. The borrower will be required to pay the interest on an annual basis. In addition to the interest payments, the borrower will need to put up collateral. The first asset put up for collateral will be the insurance policy. In the early years, the policy values are usually less than the outstanding loan balance. The shortfall is made up with outside assets. This collateral requirement can also be met with a letter of credit from another financial institution. ### There Must be a Better Way As I mentioned before, people are weary of having to put up additional collateral and don’t want to deal the complications of setting up and carrying out a traditional premium financing strategy. That’s why Advisor’s Resource Company has created a proprietary [turn-key premium financing strategy](https://advisors-resource.com/turnkey-premium-financing-program-rsquared/) called R-Squared. R-Squared is structured so that the financial commitment is much lower than traditional financing programs. This is because R-Squared utilizes a trust structure to pool multiple premium financing loans together. At the same time, it addresses the previously mentioned issues by offering: #### No Additional Collateral Traditional premium financing arrangements typically have an additional collateral requirement. R-Squared is designed to have NO additional collateral, meaning that individuals are only risking the money they have paid personally. #### Flexibility R-Squared is designed around our experience in the life insurance business. We understand clients sometimes change their mind or need their funds in other areas of their life or business. Therefore, we have designed R-Squared to be flexible. If a client decides they no longer want to participate in the program or cannot make a payment. The trustee will pay off the client’s premium financing loan using the surrender values from the policy and distribute the policy back to the client. This will leave the client with their policy and the remaining cash values. This gives clients more flexibility and options should their situation change. #### Get all the Details Want to learn how R-Squared is different than traditional premium financing? Check out our overview of this strategy:   [![Check out our R-Squared Strategy](https://no-cache.hubspot.com/cta/default/6074374/69c04db3-fee9-43f4-ae53-622f48923d79.png)](https://cta-redirect.hubspot.com/cta/redirect/6074374/69c04db3-fee9-43f4-ae53-622f48923d79) ## Related posts [![Why advisors dont (3)](https://blog.advisors-resource.com/hs-fs/hubfs/Why%20advisors%20dont%20(3).png?height=200&name=Why%20advisors%20dont%20(3).png)](https://blog.advisors-resource.com/blog/the-definitive-guide-to-premium-financing) [premium financing](https://blog.advisors-resource.com/blog/tag/premium-financing) ## [The Definitive Guide to Premium Financing](https://blog.advisors-resource.com/blog/the-definitive-guide-to-premium-financing) ![Picture of Ralph Pence](https://app.hubspot.com/settings/avatar/d41d8cd98f00b204e9800998ecf8427e) [Ralph Pence](https://blog.advisors-resource.com/blog/author/ralph-pence) Jan 8, 2020 10:14:15 AM Premium Finance Defined [Read more](https://blog.advisors-resource.com/blog/the-definitive-guide-to-premium-financing) [![Stop Selling Term Life Insurance](https://blog.advisors-resource.com/hs-fs/hubfs/Stop%20Selling%20Term%20Life%20Insurance.jpg?height=200&name=Stop%20Selling%20Term%20Life%20Insurance.jpg)](https://blog.advisors-resource.com/blog/gul-vs-term-life-insurance) [GUL](https://blog.advisors-resource.com/blog/tag/gul) ## [Stop Selling Term Life Insurance!](https://blog.advisors-resource.com/blog/gul-vs-term-life-insurance) ![Picture of Ralph Pence](https://app.hubspot.com/settings/avatar/d41d8cd98f00b204e9800998ecf8427e) [Ralph Pence](https://blog.advisors-resource.com/blog/author/ralph-pence) Oct 28, 2022 11:45:00 AM I was asked to investigate a life insurance policy recently by a CPA friend of mine. The client,... [Read more](https://blog.advisors-resource.com/blog/gul-vs-term-life-insurance) [![Principal Financial is Leaving Life Insurance Industry](https://blog.advisors-resource.com/hs-fs/hubfs/Principal-Financial-End-Life-Insurance-Business.jpg?height=200&name=Principal-Financial-End-Life-Insurance-Business.jpg)](https://blog.advisors-resource.com/blog/principal-to-end-life-and-annuity-sales) [Business Owner](https://blog.advisors-resource.com/blog/tag/business-owner), [Finance](https://blog.advisors-resource.com/blog/tag/finance), [Indexed universal life insurance](https://blog.advisors-resource.com/blog/tag/indexed-universal-life-insurance), [Split Dollar](https://blog.advisors-resource.com/blog/tag/split-dollar) ## [Principal Financial to End Individual Life and Annuity Sales](https://blog.advisors-resource.com/blog/principal-to-end-life-and-annuity-sales) [Travis Pence](https://blog.advisors-resource.com/blog/author/travis-pence) Jul 19, 2021 2:23:57 PM Principal Financial Group is planning to cease their sales of both retail life-insurance and fixed... [Read more](https://blog.advisors-resource.com/blog/principal-to-end-life-and-annuity-sales) facebook-f icon linkedin-in icon Twitter icon instagram icon --- [![advisors-resource-company-logo-horizontal-full-color-green-1](https://blog.advisors-resource.com/hs-fs/hubfs/advisors-resource-company-logo-horizontal-full-color-green-1.png?width=500&height=214&name=advisors-resource-company-logo-horizontal-full-color-green-1.png "advisors-resource-company-logo-horizontal-full-color-green-1")](http://advisors-resource.com) 446 Houston St. Coppell, TX  75019 Copyright © 2026, Advisors Resource Company ![](https://px.ads.linkedin.com/collect/?pid=6950468&fmt=gif) ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Travis Pence", "url" : "https://blog.advisors-resource.com/blog/author/travis-pence" }, "dateModified" : "2021-12-07T14:45:10.471Z", "datePublished" : "2021-10-20T16:05:23.000Z", "headline" : "Premium Financing Made Easy: A New Turn-Key Strategy", "image" : [ "https://blog.advisors-resource.com/hubfs/Premium-Financing-Made-Easy.jpg" ], "mainEntityOfPage" : { "@id" : "https://blog.advisors-resource.com/blog/premium-financing-made-easy-a-new-turn-key-strategy", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://blog.advisors-resource.com/hubfs/advisors-resource-company-logo-horizontal-full-color-green.png" }, "name" : "Advisors Resource Company" } } ```