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An option for high-net-worth clients
Premium financing can be an option for high-net-worth clients. Typically, these clients have a significant life insurance need associated with their personal and/or business assets.
Guidelines and procedures
The following guidelines apply to fixed and indexed life insurance policies. Premium financing cases will be considered when all requirements below are met.
Client guidelines
- Have a permanent estate planning or business need for life insurance
- Have a net worth of $5 million or more
- Have a liquid net worth of at least 10% of the total loan amount
- Be under age 70
- Financing of annual premium that is no more than 10% of net worth
- Sufficient income to support lifestyle
- Owner of contract may not be a charity
- Understand and appreciate leverage, interest rate risk and lending institution requirements
- Expectation to pay loan interest out of pocket regardless of the interest rate environment
- Understand that they are under no obligation to borrow
Case design guidelines
Cases must meet the following requirements:
- Annual financed planned premium must be $3 million or less per owner (or group of related owners)
- First year outlay for premium-financed cases must be at least 120% of target premium
- Premium financing arrangement must be fully collateralized
- Design should be stress tested at various loan interest rates and policy crediting rates
- Loan interest should be paid out of pocket at least annually
- Financial professional who submits a case for premium financing must have current E&O coverage that includes premium financing
- Proof of this coverage will be required
Policy features:
- May include Early Values Agreement (EVA)
- May not include:
- Surrender Value Enhancement Agreement (SVEA)
- Business Value Enhancement Agreement (BVEA)
- Long Term Care Agreement (LTCA)
- Contract cannot be a Modified Endowment Contract (MEC)
Additional requirements:
- Application must be fully underwritten
- Simplified Issue and Guaranteed Issue cases are not eligible for premium financing
- A specific trust or trustee may not be required by the lender, nor may the lender be affiliated with the trustee
- Business entities are not allowed to utilize any receivable accounts as proposed collateral in any premium financing transaction involving a Minnesota Life or Securian Life insurance product
- Financial professionals appointed with us may not finance policies on themselves or immediate family members
Cover letter guidelines
A cover letter is required with all pre-application submissions. It should include:
- An overview of the client and their financial need for life insurance
- Why premium financing is being utilized by the client
- Demonstrate the client's understanding of potential risk by describing what borrowing and crediting rate scenarios were reviewed with the client
- An explanation of the design including the anticipated handling of loan interest, the source of funds for loan interest payments and the loan exit strategy
- Death of the insured is not an accepted exit strategy
- If the exit strategy does not involve a distribution of policy value, please detail the expected source of loan repayment funds
Case submission procedures
Follow these steps when considering a premium financing recommendation:
1. Review guidelines
Read and understand the guidelines on premium financing.
2. Submit for pre-application review
All cases must be reviewed by Minnesota Life Insurance Company or Securian Life Insurance Company prior to or with application submission. To request a pre-application review, we require:
- Premium financing pre-application
- Cover letter
- Illustration showing the exit strategy
Please email these documents to advancedsales@securian.com.
You will receive a response by the second Friday after all required documentation is received.
Please note: Premium financed sales from any financial professional or group of related professionals are reviewed for concentration risk. We reserve the right to restrict premium financed sales, for any reason, at our discretion.
3. Submit formal application
If pre-application is approved, the formal application may be submitted. Be sure to include the following:
- Advisor Attestation for Premium Financing (Form F69011) along with copies of the required loan and trust documentation
- Premium Financing - Client Disclosure (Form F69012)
- Required loan term sheet
Additional documentation may be requested (e.g., trust agreements, loan documents) as needed.
4. Maintain records
Retain copies of these materials in your client files.
Please keep in mind that the primary reason to purchase a life insurance product is the death benefit.
Life insurance products contain charges, such as Cost of Insurance Charge, Cash Extra Charge, and Additional Agreements Charge (which we refer to as mortality charges), and Premium Charge, Monthly Policy Charge, Policy Issue Charge, Transaction Charge, Index Segment Charge, and Surrender Charge (which we refer to as expense charges). These charges may increase over time, and these policies may contain restrictions, such as surrender periods. Policyholders could lose money in these products.
Additional agreements may be available. Agreements may be subject to additional costs and restrictions. Agreements may not be available in all states or may exist under a different name in various states and may not be available in combination with other agreements.
The Policy Design chosen may impact the tax status of the policy. If too much premium is paid, the policy could become a modified endowment contract (MEC). Distributions from a MEC may be taxable and if the taxpayer is under the age of 59 ½ may also be subject to an additional 10% penalty tax.
For financial professional use only. Not for use with the public. This material may not be reproduced in any form where it is accessible to the general public.
DOFU 5-2026
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