aca premium finance program - description for aca members

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ADVANCED BUSINESS & ESTATE PLANNING USING LIFE INSURANCE PREMIUM FINANCING

This material was not intended or written to be used, and cannot be used, to avoid penalties imposed under the Internal Revenue Code. This material was written to support the promotion or marketing of the products, services, and/or concepts addressed in this material. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely solely on their own independent advisors regarding their particular situation and the concepts presented here.

A C A P R E M I U M F I N A N C E P L AT F O R M


About Us

For advisors with clients that can benefit from life insurance premium financing, the Aurora Capital Alliance (ACA) premium finance platform can achieve maximum results. The ACA Premium Finance platform is a funding solution, whereby clients and their advisors leverage the capital of our lenders to finance insurance premiums thereby retaining use and ownership of other investments. Through ACA Premium Finance, advisors and their clients are able to generate the maximum insurance and retained capital with flexible terms.

At Aurora Capital Alliance, we work with advisors and clients across the world to create a creative funding solution tailored to the individual needs of the client. As a program endorsed by main insurance carriers in the industry, and being one of the most successful premium finance programs, ACA is confident to deliver advisors and their clients the utmost quality and service. As the educator for the first-ever CA Department of Insurance approved CE course on Premium Finance, ACA Members and their clients are assured that they are in good hands.

ACA Member Program

As a no-cost program, members gain access to our proprietary design models and scenarios for their clients. Working with Members across the country, our Members are allowed unique access to informational material - new concepts and planning strategies utilizing our leveraged plans - and illustration support.

ACA Members Gain Access to:- Case Designs, Scenario Scripts, Point-of-Sale Support, Educational Events & Materials- Annual Servicing of Premium Finance Transactions- Preferred Rates & Proprietary Strategies; Clients are able to retain investment positions instead of liquidating to pay premiums- Three Levels of Engagement

- Exclusive case design, financing structuring, scenario scripts & annual review; ACA fee: 20% of case

- Elite same as Exclusive with additional point-of-sale webinar support; ACA fee: 30% of case

- Concierge same as Elite with additional in-person presentation and sale support by an ACA representative; ACA fee: 50% of case

ADVANCED BUSINESS & ESTATE PLANNING USING LIFE INSURANCE PREMIUM FINANCING


ACA Platform Snapshot

To maximize your success rate with the ACA programs, our clients and advisors should understand the programʼs potential. Using ACA, clients are able to obtain premium finance life insurance and retain the capital they would have otherwise spent on insurance premiums.

CLIENT PROFILE

✓ Needs and wants permanent life insurance coverage✓ Has net worth of $5MM or greater✓ Age 29 to 85 ✓ Appreciates the value of leverage (retained capital vs. the loan rate)

FINANCING OPTIONS

RESULTS✓ Maximum retained capital✓ No need to liquidate assets - Retain investment positions with investment professionals✓ High cash value accumulation potential✓ Leveraged life insurance benefit

Annual Premium $100,000 or greater

Annual Loan Rates LIBOR and Prime-based plus competitive spread; Fixed & floating options; Interest caps; Typical rate: 1 Year LIBOR + Fixed Spread = Rates as low as 2.5%

Terms 10 year terms available

Interest Payment Options

Annually, Quarterly, Up-Front or Arrears - Capitalized Interest may be available

Fees Possible appraisal fee & letter of credit fee (typically 1% to 2% of LC amount)

Collateral SBLC on real estate, cash or cash equivalents; Including marketable securities, annuities and cash value life insurance

39 Year old Female $407,495$1,472,082

In this case, our client is leveraging a lender’s capital to accomplish her wealth transfer and retirement objectives while minimizing out of pocket expenses. Based on our assumptions, our client can anticipate a death benefit in excess of $8MM with minimal annual contributions to the plan. Repayment of the outstanding loan balance is anticipated to occur from the life insurance policy values during our client’s life.

51 Year old Female $3,150,563$7,561,600

In this case, our client is leveraging a lender’s capital to accomplish her wealth transfer and retirement objectives while minimizing out of pocket expenses. Based on our assumptions, our client can anticipate a death benefit in excess of $20MM with minimal annual contributions to the plan. Repayment of the outstanding loan balance is anticipated to occur from the life insurance policy values during our client’s life.

73 Year old Female $2,779,200$21,220,800

In this case, our client is leveraging a lender’s capital to accomplish her wealth transfer objectives while minimizing out of pocket expenses. Based on our assumptions, our clientcan anticipate a death benefit in excess of $10MM with minimal annual contributions to the plan. Repayment of the outstanding loan balance is anticipated to occur from thedeath benefit of the life insurance policy.


How Borrowing Rates are Determined

In most ACA premium finance transactions, the borrowing rate is based on 1 year LIBOR. The historical average of 1 year LIBOR rates over a 10 year period (1 Jan 2003 to Sept 2013) is 2.43%. Most of our rates are collared, such that they have a floor (usually 2%) and a cap (usually at 6%). The spread (in this example 150 bps) is fixed for the term of the note. Most of our notes are 10 year terms. Therefore, the fluctuation in rates is based on the 1 year LIBOR + a fixed spread, within the parameters of 2% and 6% (the collar points).


How Crediting Rates are Determined

ACA premium finance transactions utilize a variety of insurance chassis - from Whole Life to Indexed Universal Life. The examples below demonstrate the comparison between investing in the S&P 500 from 2001 to 2012 and investing in an indexed strategy that resembles that of an indexed universal life policy. The indexed strategy represented does not take into consideration costs of insurance and fees. It is merely a representation of the indexed strategy for analysis purposes. In our premium finance scenario scripts, we assume an average S&P 500 return of ~ 5%.

CHOOSE A COMPANY YOU CAN TRUST

Aurora Capital Alliance, Inc.402 West Broadway

Suite #400San Diego, CA 92101

Toll Free: (888) 389-PLAN (7526)Local: (619) 595-4832

[email protected]


aca premium finance program - description for aca members

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