Borrow at SOFR+1.5% to pay life insurance premiums, arbitrage against policy crediting.
Bank lends 100% of premium to fund a large IUL/whole-life policy on a high-net-worth insured. Interest ~SOFR + 1.5% (paid annually or accrued). Policy crediting typically 5–7% net. Positive spread + tax-free death benefit + eventual policy exit repays loan. Risks: rate rises above crediting rate, crediting shortfall, collateral calls. Best for insureds age 45–70 with $10M+ liquid net worth.
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Overfund whole life, borrow against cash value at 5–6%, arbitrage into real estate.
Overfund IUL to MEC line — tax-free retirement income via policy loans.
Business pays premium, executive gets death benefit — pennies on the dollar of tax exposure.
Wrap hedge funds/PE inside a tax-free life policy — no LTCG, no ordinary income.
Business pays deductible premiums to owner-controlled captive — up to $2.85M/yr tax-free receipts.
Layer umbrella and excess policies for $5M–$50M liability coverage at $500–$5K/yr.
Take higher deductibles on rarely-claimed policies; pocket the premium savings.
Company-owned life on a critical exec — cash value grows tax-deferred, death benefit tax-free.