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Investment Loan Strategy

The Investment Loan Strategy

Transamerica’s Investment Loan Strategy (ILS) integrates complex knowledge, carefully optimized products, and personal consultation to produce results that are at once simple and effective.
In other words, we provide the logic behind the solution.
-Protect your family or business using a permanent universal life insurance policy
-Invest in your business or other qualified investment using your insurance policy to obtain secured loans
-Qualify for tax-savings that can offset your life insurance costs

The ILS is a financial solution that uses a universal life insurance policy, policy loans, and tax-deductible interest payments to solve several important financial needs. Working with your insurance, tax and legal advisors, the ILS can deliver significant benefits for your family, your business, and your bottom-line.

Implementing the strategy

Step 1
The first step in implementing the ILS is to establish a Transamerica
WealthAdvantage or EstateAdvantage universal life insurance policy with the death benefit, premium level and investment options that suit your personal or business needs.
This strategy is best suited for clients who are willing to make a minimum annual premium deposit of $25,000 in the first three years.
Step 2
Once you’ve made your first premium deposit, you can use the Maximum Loan Value of your policy to secure a policy loan.
Provided that the amount of the loan does not exceed the adjusted cost basis (ACB) of your policy, tax will not be payable on the proceeds.
Further, Transamerica will never demand repayment of the loan.
Step 3
Next, you invest the proceeds of the loan into your business or other qualified investment.
Step 4
You pay the interest due on the loan each year and, under current tax guidelines, this expense may be tax deductible.*
Step 5
The tax savings generated by the strategy may be used to help offset the cost of your insurance policy.

Investment Loan Strategy Diagram

Is the ILS right for you?

If you need low-cost, permanent life insurance and would like the freedom to invest in your business or other qualified investment, the ILS can deliver compelling benefits.
Provided you have sufficient cash flow to fund insurance premiums and interest payments and are in good health, your insurance advisor can create a personalized plan showing you exactly how Transamerica’s Investment Loan Strategy can efficiently protect your family or business interests without giving up control of your capital.

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