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Topics for Discussion. Premium finance environment Ridge Capital Group Flexible Premium Finance Loan Loan options Full disclosure Underwriting and transaction process. Premium Finance Environment. Reinsurance carrier issues Carrier underwriting restrictions
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Topics for Discussion • Premium finance environment • Ridge Capital Group Flexible Premium Finance Loan • Loan options • Full disclosure • Underwriting and transaction process FOR AGENT USE ONLY. NOT FOR USE WITH THE PUBLIC.
Premium Finance Environment • Reinsurance carrier issues • Carrier underwriting restrictions • ACLI, NAIC, NCOIL industry proposals • Insurance commissioner positions • “Stealth” programs • Risks FOR AGENT USE ONLY. NOT FOR USE WITH THE PUBLIC.
Ridge Capital Strategy • Loan program with options as to the type and amount of collateral • Full disclosure • Favorable loan terms (costs, i-rate) • Loan “platform” with options that can evolve as the industry and carrier positions evolve • Turn-key underwriting and transaction process • No pre-determined course of action for the insured FOR AGENT USE ONLY. NOT FOR USE WITH THE PUBLIC.
Ridge Capital Program Overview • The Ridge Capital premium finance loan provides eligible seniors with the ability to finance life insurance premiums for up to 10 years. • Flexible loan with different loan options depending on needs of Insured and carrier acceptance: • Option A – Personal guarantee • Option B – L.O.C. or pay interest current • Option C – hybrid • Carriers only receive cases financed with options that they have specifically approved FOR AGENT USE ONLY. NOT FOR USE WITH THE PUBLIC.
Loan Structure • MN ILIT – owner, borrower, and beneficiary • Single Life UL Policies • Insured’s age 70 - 84 • Minimum FV of $2.5M • Maximum FV of $50M • Maximum 10 year loan • Collateral options FOR AGENT USE ONLY. NOT FOR USE WITH THE PUBLIC.
Program Structure Note: no lender ownership interest in policy or trust FOR AGENT USE ONLY. NOT FOR USE WITH THE PUBLIC.
Loan Options Review Summary of Terms: • Three loan/collateral options (A,B,C) • Interest rate structure • Collateral requirements • Changing requirements and reducing prepayment penalties • Cost structure FOR AGENT USE ONLY. NOT FOR USE WITH THE PUBLIC.
Ridge Capital – Option A • Currently, ING, Trans, Phoenix and Penn Mutual have agreed to accept Option A with certain products. All current medical and financial underwriting standards must also be met. • Ridge Capital’s option A requires different forms of collateral during the loan term. *Letter of Credit is equal to the loan balance due on the next policy anniversary less the cash surrender value of the policy. FOR AGENT USE ONLY. NOT FOR USE WITH THE PUBLIC.
Ridge Capital – Option B • Currently, Trans has agreed to accept Option B with certain products. All current medical and financial underwriting standards must also be met. • Ridge Capital’s option B requires different forms of collateral during the loan term. *Letter of Credit is equal to the loan balance due on the next policy anniversary less the cash surrender value of the policy. FOR AGENT USE ONLY. NOT FOR USE WITH THE PUBLIC.
Ridge Capital Program Fees & Expenses • Minimal out-of-pocket expenses of $100 for entity information. • Third-party trustee and manager fees of $3,200 annually and one-time associated legal fees of $2,500; can be amortized. • No Lender origination fees. • No reinsurance or gap insurance fees • Early termination fees (declining to zero) during first five years FOR AGENT USE ONLY. NOT FOR USE WITH THE PUBLIC.
Identifying Candidates for the Ridge Capital Program • Insureds must have sufficient needs for the amount of insurance for which they have applied. Must meet carrier underwriting standards. • Age 70 or older • The Insured must be a high net worth individual represented by professional advisors. • Minimum face value of $2.5 million • The policy must be a universal life policy with a maturity extension rider. FOR AGENT USE ONLY. NOT FOR USE WITH THE PUBLIC.
Potential Risks • Reduction of insurance benefits • Rising interest rates • Changes to the regulatory • climate • Taxation • Insurability of individual seeking • coverage FOR AGENT USE ONLY. NOT FOR USE WITH THE PUBLIC.
Benefits of the Ridge Capital Program • 10-year loan program financed by an international bank • Full disclosure • Collateral options • Insureds retain flexible control over their insurance policy • Provides Insureds with all of the benefits of a premium finance program • No pre-determined course of action for insured – it’s the client’s choice • Adds an important planning tool to agents’ financial planning capability FOR AGENT USE ONLY. NOT FOR USE WITH THE PUBLIC.
Important Notice The information provided above is a summary for life insurance agents or financial advisors use only, and is not intended for use by any consumer or potential insured or as a full explanation of a Ridge Capital Flexible Premium Financing Loan nor is the information provided herein part of the loan documents or financing agreement governing the loan. Ridge Capital Flexible Premium Finance loan are underwritten and funded by Churchill Finance, LLC, a Minnesota limited liability company and is originated by Ridge Capital Group, LLC. No insurance agent or broker shall be deemed to represent Ridge Capital Group, LLC, Churchill Finance, LLC or any of their respective affiliates. This presentation should not be relied upon by any person or party in making any decision related to any application for, or purchase or financing of any life insurance policy. Any interested person will be required to consult his or her independent legal, tax and financial advisors prior to entering into any premium financing transaction. Ridge Capital Group, LLC, Churchill Finance, LLC and their representatives make no representations or warranties, express or implied, by any of the above statements. All transactions are subject to lender approval, at its own discretion. Terms and conditions of transactions are subject to change at any time. FOR AGENT USE ONLY. NOT FOR USE WITH THE PUBLIC.
