First-Dollar Financing (FDF)
HOW IT WORKS:
In this program, the client begins borrowing premiums and paying the full interest out-of-pocket starting in year one. Interest is paid each year until the third-party loan is paid off (typically sometime between policy year 11-16).
There will always be an outside collateral requirement in this program, and the client is required to sign a personal guaranty on the loan. Different lenders on our platform (we currently have 14) will require different forms of collateral (cash, bonds, marketable securities, CDs, cash value of in-force policies, and sometimes even real estate equity). Some lenders will require collateral to be moved and housed with them, and other lenders will simply take a collateral assignment against the funds house by the current institution that manages the client's portfolio.
To watch a video of Darren Sugiyama reviewing an actual case study, click on the type of solution you are looking for below: