Immediate financing arrangements that leverage permanent life insurance policies grow in popularity

Globe & Mail
April 7, 2022.

Permanent life insurance is no longer just about providing security and cash for beneficiaries after death. It’s a strategic wealth generation product advisers can recommend to their clients for low interest loans through an immediate financing arrangement (IFA).

Specifically, an IFA leverages the universal or whole life policy clients own so they can use it as collateral to obtain a loan. The funds can be used toward their investment portfolio, business or to purchase real estate.

What makes IFAs appealing is how they’re structured and the flexibility they offer. Once clients acquire a policy, they can apply for an IFA. The client pays the premium at the beginning of the policy year and can borrow up to 100 per cent of the cash value immediately at a low interest rate, often at or just above the prime rate.

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