Bank insurance

How are Equitable Bank’s insurance loan solutions unique from other lenders?

Although these loan solutions are not new to the market, there are some niche strategies that you may not be familiar with. Equitable Bank, for example, offers a suite of three insurance loan solutions.

“We like operating in unique spaces and have a philosophy of not doing what every other bank does,” says Tom Schiersch, Director, Insurance Lending and Wealth Management Solutions Sales, Equitable Bank. “We are proud of the high level of commitment from brokers and advisors, as well as customer service.”

Equitable offers two lines of credit with cash value: FLEX and MAX. The FLEX is designed for older customers (50+) who simply need access to a lower percentage of cash value, and no monthly interest payments are required. Meanwhile, there is no age requirement for the MAX line of credit, and customers can access 90% of the CSV, paying only the monthly interest. Learn more about each solution here.

Another insurance loan solution offered by Equitable is an Immediate Financing Agreement (IFA). And, unlike other lenders, Equitable does not require excess collateral to fully secure the loan.

An IFA is designed for high net worth clients who have a large whole life insurance premium, typically $100,000 or more.

“They were successful in their business and in life in general, which resulted in a large impending tax bill upon death,” says Michael Pilz, Head, National Sales, CSV Lending, at Equitable Bank. “The insurance they buy is going to help preserve the estate, cover taxes, etc.”

By adding an IFA, customers can get full liquidity for the premium value of the insurance, he adds. “It’s a strategy to give them the best of both worlds. They will buy the insurance policy and pay the premium. But by working with a lender, like Equitable Bank, they may be able to borrow that same premium dollar to use for other purposes they want, like reinvesting in their business, for example.

Case study

Let’s apply this strategy to a hypothetical customer scenario to better understand how it works. The customer’s contact details are as follows:

Applicant: Borrowing company with guarantor
Age: 46 years old
Profession: Real estate developer
Assets: $3 million
Permanent whole life insurance premium: $150,000

In this situation, Jackie Uy Ham, Vice President, Growth Businesses at Equitable Bank, explains that a permanent contract would be advantageous for the client. They would have access to the entire $150,000 bonus, which they could reinvest in their business to generate returns.

“The client is able to purchase their policy and pay minimal payments, essentially interest only, on an ongoing basis,” says Uy Ham. “Then, with an IFA, they instantly release all the money they just invested in policing. It is a smart game for many wealthy people.

Additionally, that client would not be required to provide excess collateral to secure the loan, which can be difficult for developers who own many properties, she says. This is because many lenders will not accept real estate as excess collateral as there are still mortgages on the properties so clients do not fully own them.

“Even though this client may have 10 properties, each worth $1 million and perhaps only $1 million in total mortgages, each property has $100,000 on it, this may not be acceptable security for other lenders” , adds Pilz. “There’s no need to worry about that with us.”

Equitable also offers competitive rates. “The rate at which a transaction is eligible is based on many factors. The main ones being the size of the loan and its security. In many cases, we expect these key factors to improve as the IFA strategy unfolds over the coming years. That being the case, a borrower might expect their rate to also improve over time,” he says.

Discuss IFAs with customers

Ready to incorporate IFAs into conversations with affluent customers? First, be sure to identify an IFA opportunity; the client must have a strong need for insurance.

“If the client hesitates and says, ‘I make more money when I have that dollar in my business or investment account’, that should be a trigger for the advisor that the client has a potential IFA need. says Pilz.

He adds: “There are a lot of advisors interested in the IFA space because of the bigger bonuses involved. However, International Framework Agreements are an advanced concept, and advisors would be doing themselves and their clients a huge service by ensuring that they are knowledgeable and educated on all associated aspects. IFAs are part insurance, part loan, a kind of marriage. Advisors should ensure they have the knowledge to identify opportunities, ensure client fit, and be able to work with the insurance company and lender to ensure success.

Ready to learn more about Equitable Bank insurance loan solutions? Contact our team at [email protected] or visit

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