Premium Finance IUL for High-Income Executive Retirement Planning
With her retirement accounts already maxed out, Emily wasn’t looking for just another place to park money—she wanted a way to turn six figures of annual savings into something far more powerful. By blending leverage with life insurance, she discovered a strategy that could transform today’s cash flow into decades of tax-free income and long-term family protection.
Andrew Perez
September 17, 2025
Client profile
Age
45
Occupation
Tech Executive (Publicly Traded Company)
Marital Status
Married, two kids (ages 10 & 13)
Annual Income
$700,000 (including RSU vesting)
Challenge
Emily had already maxed out her 401(k) and backdoor Roth contributions but was looking for an additional tax-free retirement income stream. She wanted to allocate $100,000 per year toward a cash value life insurance strategy but saw the potential to multiply the effect by using leverage.
Solution
- Product Type: IUL – Max-Funded, Non-MEC
- Premium Design: $500,000 annual premium for 10 years (total $5M)
- Funding Strategy:
- Emily contributes $100,000 annually as collateral and interest reserve
- Bank finances remaining $400,000 per year
- In year 15, loan is repaid via partial policy cash value withdrawal
- Future cash value then used for tax-free income via policy loans
Why It Worked
Premium financing let Emily create a much larger policy and cash value accumulation than she could have achieved by self-funding. This amplified her future tax-free income potential and provided a large death benefit for family protection.
Outcome
At age 65, Emily is projected to take $250,000 per year tax-free for 20+ years, supplementing her 401(k) and equity comp. She also likes that the death benefit ensures her family is taken care of, even during the early funding years while the loan is outstanding.