Kai-Zen Premium Financing

Kai-Zen (meaning change for good) is a strategic method that enables you to continue a lifestyle that you enjoy if you were to unexpectedly come down with a chronic or critical illness, unexpectedly die, or are unable to save enough money for a comfortable retirement.

In many cases, traditional retirement plans that are generally limited and therefore insufficient for workers considered to be high-income earners. For earners who set goals to maintain an expected lifestyle during retirement, must have a defined and dedicated strategy that ensures more money for protecting their future income but without draining current finances.

We have found that Kai-Zen is an exclusive strategy that utilizes leverage to assist with acquiring the benefits you require to protect you and your loved ones financially. Kai-Zen is a particular combination of financing and life insurance that provides the protection required and the significant potential to increase earnings for retirement that you would otherwise not have access to without this leverage.


How Does Kai-Zen Work?


Kai-Zen is a straightforward strategy. Insurance premiums are mutually funded by bank financing combined with the participant or the participant’s employer. The bank or lender funding is responsible for the majority of the contributions to the plan, and then the life insurance policy is the security for the loan. The Kai-Zen strategy is fashioned so that the participant is never required to undergo financial underwriting or sign documents related to the transaction. Additionally, the Kai-Zen structure is designed to protect your benefits from an employer’s bankruptcy.

Simply put, Kai-Zen allows you to purchase a very large life insurance policy that has a much larger death benefit, considerably more living benefits, and the ability to build substantial cash accumulation without the usual concerns for market volatility.

Who is Eligible to Use Kai-Zen Premium Financing?


Eligible candidates for Kai-Zen are individuals age 18 to 65 who have are in average or above average health and earn at least $100,000 annually. Individuals over 65 generally cannot participate in the program because of the financing conditions of the program. In other words, someone who is age 65 or older will not have the time required to accumulate sufficient cash in the insurance policy that is needed to repay the bank loan and continue to have enough cash for retirement or a legitimate death benefit.


Who are the best Candidates for Kai-Zen?


Kai-Zen was developed to be an executive benefits arrangement that targets well-compensated individuals or groups like law firms, physicians, CPAs, and other highly compensated professionals who require a proven strategy over and above a traditional 401(k) or IRA that can assist with saving for retirement and achieving their goals for the future. The Kai-Zen strategy is also a highly viable solution for Key-Person Insurance, Buy-Sell Agreements, and other business continuation strategies.


call us now graphic

Is there a  Minimum Death Benefit is Required?


Generally, the minimum death benefit that will be considered is $1.5 million but there is no maximum benefit as long as the participant’s annual income, net worth, and in force insurance, justify the face amount applied for.


It’s important to note that the life insurance policy must accumulate sufficient cash in the insurance policy that is needed to repay the bank loan and continue to have enough cash for retirement or a legitimate death benefit.


When Can I Access the Funds for Supplemental Income?


The Kai-Zen premium financing program is generally constructed for the participant (insured) to begin accessing accumulated funds when they reach retirement age (65 or older). The program is set up, however, for the loan to be repaid in the 15th year, so technically you will have access to the cash in your policy using tax-free policy loans after the 15th year.


Do I have to Pay Annually, Quarterly, or Monthly?


When the Kai-Zen plan is set up for you, an annual contribution is required upfront. Going forward, you can elect to fund your trust on a monthly or quarterly basis as long as the full annual contribution is in your account. The participant can also elect to pay all 5 required contributions either up front or in some other manner within those five years.


What is the Primary Benefit of Kai-Zen vs. a Traditional Purchase?


By utilizing a third-party lender for premium financing, Kai-Zen makes it possible for the participant (insured) to buy a policy with a higher death benefit than they would have ordinarily been able to afford. This outside financing also allows the policy to build significant cash value at a greater rate.

Also, since the policy has a much higher death benefit, the living benefits like the accelerated death benefit will be much higher as well. The bottom line is the policy’s increased cash value will provide substantial funds for a higher supplemental income after the loan has been paid off.


Is Kai-Zen only for Individuals or can a Company Take Advantage?


The Kai-Zen third-party premium financing strategy can be sold to individuals or to groups of individuals in a company. This will benefit a company by allowing a group of unrelated workers to obtain third-party financing at a very attractive rate.

For groups of employees who are related, and assuming the group is big enough, the group can obtain financing at for a lower death benefit which can easily make the Kai-Zen strategy an attractive method for purchasing life insurance for the company and the employees.


Which type of Life Insurance Product is best for Kai-Zen Premium Financing?


Indexed Universal Life (IUL) insurance proves to be the best insurance product for the Kai-Zen strategy for the following reasons:

  • It is an attractive asset for the third-party lenders to collateralize because the IUL builds cash value over time.
  • Since the IUL will contain a “cap” and “floor,” the policy’s cash account remains safe in a volatile market thus preserving the security for the loan.
  • The tax advantage inherent with an IUL makes it an excellent vehicle for establishing an additional income stream in retirement.


Premium financing insurance products is not new to the insurance industry. In fact, third-party financing has been used for decades. Using the Kai-Zen strategy as leverage to purchase life insurance works very well for high-income individuals by allowing them to afford the protections they require and at the same time, maintaining their liquidity.

What carriers allow Kai-Zen to finance their policies?

If you are looking for carriers that work with Kai-Zen financing, you can read our reviews for the following:

Of course it all starts with a proposal.  We can determine what carrier will work best for you with a quick fact finding interview.

We are Here for Your Needs
For more information about Kai-Zen Premium Financing, please call us at (800) 712-8519 during normal business hours or contact us through our website and we’ll be happy to discuss it.
About Doug Mitchell
About Doug Mitchell

Doug Mitchell, CLU holds a BA degree in Finance from Auburn University as well as having obtained a Chartered Life Underwriter (CLU) designation from The American College in Bryn Mahr, PA.  Doug has spent over 20 years in the life insurance industry and has also held licenses to sell securities, long-term care insurance, home and auto insurance.  For two years, Doug served as President of the Auburn Opelika Association of Financial Advisors and has been a member of the Million Dollar Round Table.  He obtained Life Millionaire status at Horace Mann Insurance Company and was awarded the Life Agent of the Year Award.  Later in his career with New York Life he was an Executive Council Member.  Doug currently serves as President of Ogletree Financial, a life insurance marketing organization with over 1000 life insurance agents.  Today, Doug’s main focus is servicing 1000s of policyholders and growing his agency through the reach of www.insurancequotes2day.com.

This entry was posted in Indexed Universal Life, Indexed Universal Life Insurance, Physicians. Bookmark the permalink.

Leave A Reply