Premium Financing has long been an utilized strategy for leveraging the financing of insurance premiums to accomplish long-term goals.
With our uniquely designed solutions through exclusive partnerships with the finest financial institutions in the world, we are now able to provide enhanced Premium Financing strategies that are unparalleled in the industry.
Our specialized strategies include solutions for a wider range of high-net worth individuals, businesses and non-profit organizations.
Reduces or eliminates the out-of-pocket cost for life insurance.
Retains capital for other growth opportunities.
Maximizes potential tax advantages.
Looks to increase internal rates of return.
Leverages net worth to compound and grow wealth.
Select Client Challenges We Address:
Estate Tax Mitigation
A proprietary solution designed for estate tax-mitigation for those with net worth of $25M+.For financially and philosophically aligned clients, these strategies are generally utilized for the financing of premiums and interest of $10M-$400M of permanent life insurance.
Business Owner Retirement and Succession Planning
Architect your own exit. Designed for business owners designed to unlock the unrealized equity value of their business for succession planning and supplemental retirement income.
Buy/Sell Business Protection
Advanced planning and strategy for businesses with multiple partners.
Discriminatory Executive Benefits and Worksite Benefits
Golden parachute / golden handcuff strategies to attract and retain key talent. Company-wide solutions designed to promote employee engagement and retention through life insurance policies with optional Long Term Care (LTC) riders.
Retirement Income Strategies
Supplemental retirement structures designed for family protection and tax-free retirement income generation.
Long and Short-Term Financial Protection
Advanced strategies for long and short-term financial exposure.
LIRDA (Life Insurance Relative Deviation Analysis)
A free life insurance review service we offer to clients, professional partners, and trustees, LIRDA (Life Insurance Relative Deviation Analysis). We seek to unearth more cost-efficient coverage with better performing products. The UPIA (Uniform Prudent Investor Act) requires trustees and fiduciaries to manage, monitor and evaluate all investments in their care ANNUALLY.
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The Red Oak PFS Solution
Estate Amplification for Clients with $25M+ Net Worth
Red Oak PFS serves individual and business clients with financial solutions to address everything from complex income and estate challenges to short-term risk mitigation. Through working with our valued carrier partners, we have developed proprietary solutions which we believe have shaped the entire industry. Among the most compelling and meaningful of those is The Red Oak PFS Solution.
For those clients who qualify financially and philosophically, the The Red Oak PFS Solution may enable them to acquire up-to $400M estate protection, while having the option to finance premiums and interest. The proceeds of the The Red Oak PFS Solution are likely paid income tax-free and potentially estate tax-free. The underlying asset acquired is designed to be volatility protected; which is intended to help further protect the client's financial interests.
Collateral posted by the owner of the policy can typically be cash, managed assets (generally 70% of their value) or a letter of credit. If the client chooses to post securities and/or equities the strategy generally permits them to remain invested and managed by the client’s existing RIA, and funds do not need to move.
Due to the unique, proprietary structure that finances premium and interest, the client should not need to use much, if any of their gift tax exemption capacity to secure the benefits of a The Red Oak PFS Solution.
The Red Oak PFS Solution offers a very well-established structure for helping ensure multi-generational wealth transfer, enhanced philanthropic giving and/or additional passive tax-free income.
The Red Oak PFS Solution Benefit Analysis
✓ Estate Tax-Mitigation
✓ Principal Protected Growth
✓ Likely Income Tax Free and Potentially Estate Tax Free
✓ Flexible Collateral Options✓ Potentially No Impact to Lifetime Gifting Capacity
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PRSPlan™
Executive Retirement and Business Exit Strategy
Red Oak PFS has supported business owners to feel more secure in their long-term planning objectives while navigating ever-changing business environments.
Perhaps most notably, business owners have employed our proprietary PRSPlan™ which offers a strategic advantage in addressing business exit, succession planning, and retirement security. This is accomplished largely by activating the unrealized equity value of the business itself years before a liquidity or exit event.
Many business owners may want to sell their business at some point. In the event the business cannot be sold to an outside or internal party, an implemented and seasoned PRSPlan™ may be utilized to strategically position your business to have the funds necessary to help fund a transaction. This strategic advantage is intended to help business owners take control of their own destiny decades into the future.
Additionally, a PRSPlan™ is designed to help meaningfully reduce certain of the short-term risks that are present to all business owners in the event of their untimely death.
The underlying asset acquired is designed to be volatility protected; which is intended to help further protect the clients financial interests.
PRSPlan™ Benefit Analysis
✓ Unlock Dormant Business Value
✓ Short-Term Risk Protection
✓ Business Exit Planning
✓ Possible Tax-Free Retirement Income
✓ Principal Protected Growth
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Life Insurance Portfolio Review Service
Life Insurance Relative Deviation Analysis (LIRDA)
Often clients may make the decision to financially protect their family with the acquisition of one, or many, life insurance policies. These policies may often be unreviewed for years, if not decades. Potentially exposing the client to higher premium obligations than necessary with less financial protection.
Due to this, Red Oak PFS has a long-standing LIRDA (Life Insurance Relative Deviation Analysis) practice, which is a free service to clients, financial and legal professionals, and trustees.
Life insurance policies held by an individual, company, or trust should be reviewed annually by a licensed insurance agent in an effort to ensure the client is adequately protected. Often through LIRDA reviews, Red Oak PFS can save the client money, move to better performing products, and increase coverage or maximize income potential.
For trustees of Life Insurance Trusts, whether they be CPAs, attorneys, or friends of the grantors of these trusts, we recommend the life insurance policies be reviewed annually in order to seek to protect grantors from unforeseen changes and seek to protect the trustees from legal exposure resulting from changes in the original scenario. We recommend that this review should include the following steps: administrative review, insurance carrier review, policy performance review, and optimization review.
LIRDA Benefit Analysis
✓ Free Service Provided by Red Oak PFS
✓ Annually Required For Trustees of Life Insurance Trusts
✓ Potentially Saving the Client Money
✓ Potentially Amplifying Benefits or Coverages for the Client
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Worksite Programs for Employees
Attract and Retain Talent with Award Winning Benefits Offers
In today's competitive job market, offering attractive benefits packages is essential for recruiting and retaining top talent. Today, many employees rate benefits as a key contributor to job satisfaction.
Offering worksite life insurance with life insurance that may include Long Term Care (LTC) riders could be a benefits differentiator which may be a significant consideration for attracting and retaining talent.
By providing such benefits, employers can demonstrate their commitment to supporting their employees not only during their active working years but also in their retirement and beyond. This coverage helps offer employees peace of mind, knowing that their loved ones may receive benefit in the event of their passing, and that they may have access to long-term care services should they need them in the future.
The implementation of a worksite life insurance strategy can potentially give employers an edge in attracting skilled professionals who are looking for insurance coverage and stability in their employment. Beyond that, guaranteed issue life insurance may help protect those of your employees who have pre-existing health concerns.
Ultimately, alongside a comprehensive employee benefits program, guaranteed issue life insurance may provide your company with a strategic advantage over companies that do not provide additional life insurance solutions.
Worksite Programs: Guaranteed Issue Life Insurance with LTC
✓ Strategic Advantage in Talent Acquisition and Retention
✓ Provides for Your Company’s Most Vulnerable and Perhaps Least Insurable Talent
✓ May Include Long Term Care Riders for Catastrophic Health Occurrences
✓ Often More Accessible and Affordable for Companies than Alternative Strategies
Who is the Plan For?
High Net Worth Individuals or Business Entities: Specifically, those with a current net worth of $25M or more. The program looks to provide leverage for high income generators and helps families protect their hard-earned assets.
Net Worth is used to determine how much Life Insurance an Individual/Spouse can qualify for the Estate protection program. Gross Income is used as the qualifier for the Tax-Free Income generation program. Oftentimes, your net worth will also include business value times your ownership percentage.
For those clients who do not yet have a $25M there are other structures we can offer which are equally as compelling with similar benefits. Clients Gross Income is used to determine the future Tax-free distribution program (Gross Income X an Age Multiplier)
1) Clients Seeking Estate Tax Mitigation:
Individuals who are looking to reduce their estate tax liabilities.
2) Clients seeking to create significant future tax-free distribution streams: Client uses their Gross Income (Gross Income X an Age determined Multiplier = Qualifying Amount of Insurance - the larger the Gross Insurance the greater the future tax-free distribution) to build a future tax-free stream of distributions for life. This structure closely resembles a large Roth IRA type program or Tax-Free pension type account with bonus Life Insurance protection.
3) Philanthropic Clients: Those who are interested in enhancing their philanthropic giving.
4) Clients Focused on Multi-Generational Wealth Transfer: Those wanting to ensure wealth transfer across generations without significant tax implications.
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What Does It Do?
1) Provides Permanent Estate Value Life Insurance: This structure can likely provide up to $400 million of permanent estate value for $0 out-of-pocket (ever). life insurance coverage.
2) Tax Benefits: The proceeds from the structures are income tax-free and potentially estate tax-free.
3) Collateral Options: Allows the use of various collateral options including cash, managed assets, or a letter of credit.
4) Volatility Protection: The underlying asset is principal protecting, by regulation the principal value of the assets cannot go down due to market performance. Ensures that the underlying asset is protected from market volatility, safeguarding the principal amount.
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How Does It Benefit the Client?
1) Estate Tax Mitigation: This structure can typically off-set the entire amount of estate taxes payable, preserving more wealth for your heirs and causes you care about.
2) Principal Protection: Ensures that the principal amount invested is not negatively affected by market changes. Clients could access various Index strategies like S&P 500, NASDAQ 100 along with other blended strategies that have zero risk and significant upside.
3) Flexible Collateral Use: Clients can use the structure with zero cash outlay and various collateral options.
4) In The Majority Of Cases, No Out-of-Pocket Premiums: The unique structure finances 100% of the premiums and interest, meaning the client does not need to use gift tax exemption capacity. In the majority of our solutions, clients can reallocate their capital from paying large current insurance premiums into more advantageous personal investment opportunities.
5) Tax-Free Benefits: Provides the option for clients to access tax-free income during their working or retirement years, for any reason without penalty.
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Why Should the Client
Get the Plan?
1) Maximize Wealth Transfer: Ensures that a significant portion of wealth is transferred to heirs or charitable organizations without heavy tax burdens. The tax-free distribution plan can provide 6-7 figure future tax-free distribution streams for life. Many of our clients take advantage of positioning both strategies.
2) Secure Financial Legacy: Protects the client’s wealth from market volatility and taxation, ensuring a stable financial legacy.
3) No Immediate Cash Outlay: The financing structure allows clients to access these structures with zero out-of-pocket capital outlay.
Premium Financing is a strategy whereby a qualified borrower accesses third-party financing to pay for large life insurance premiums.
The insurance companies have constructed specific products for these financed plans to minimize outside collateral needs and maximize returns.
This allows individuals and businesses to leverage current assets, maximizing returns via a predetermined cash flow.
Every premium financing strategy is custom-made, with every strategy following a similar path:
1. The process begins by determining insurance coverage needs and financial suitability.
2. A preliminary case design is developed and discussed.
3. Many variations of the design are run until the ideal plan is picked by the client.
4. Formal insurance carrier underwriting and bank financing applications begin.
5. The policy is issued by the insurance carrier. The financing bank requires the owner of the policy be an Irrevocable Life Insurance Trust (ILIT), or an LLC.
6. The client provides collateral to the bank in the years when the loan balance is above the cash value inside the policy (usually 8-12 years if insured is under age 60). The shortfall collateral consists of cash and cash equivalents.
7. When approved the bank wires the premium payment(s) to the life insurance company.
8. Annual reviews should be conducted to evaluate insurance policy performance and ensure successful renewals.
9. Once the policy generates cash value above the loan balance the owner can request tax-free loans based on the excess cash value inside the policy beyond the loan balance.
Are you looking for a new and powerful way of re-recruiting your top performers for the long term?
How about a significant edge on your competition in recruiting the best people in your industry?
All CEOs know how tight the job market is today and how critical it is to retain their best people.
One of the greatest concerns for Fortune 1000 companies today, as well as any other well-run company, is employee retention – and for good reason:
Fortunately, there is a solution to this challenging problem. We can assist you in financing the future retirements of your key people with tax-free income for life.
At Red Oak Premium Finance Solutions, we are dedicated to helping companies reward and retain their top talent. We accomplish this through our unique Recruit, Retain & Reward program, designed to provide select employees with tax-free income for life.
Our program can be custom-tailored to significantly improve your company’s employee reward plan.
And, with the powerful benefit of tax-free income for life, our program can also help your company to retain its top talent more effectively.
The ultimate goal is to help you attract, retain, and reward your select employees.
Employers may offer this exclusive benefit with very little to no out of pocket cost. Contact us below to learn more about our unique Recruit, Retain & Reward program.
