Lady in a yellow jacket.

Need significant coverage?

Successful individuals, entities and business owners often need to purchase more life insurance than other Americans.

A premium financing strategy may be useful when you want to leverage life insurance for legacy and business planning, but don't want to liquidate the assets you have tied up in a business or in other profitable investments.

How commercial premium financing works

direct from consumer

You borrow money from a third-party lender to fund your life insurance premiums.

money in the palm

The lender makes premium payments to Lincoln.

credit card

You make payments to the lender for interest and/or a portion of the principal.

gold bars

The addition of a rider may provide high early cash value from the policy that can be used as collateral to secure a portion of the loan.

dollars in the hand

The lender is repaid with a policy distribution, other assets or both.*

switch places

Upon the insured’s death, the death benefit is paid to the beneficiary or to the lender if the loan has not been repaid.

Ask your advisor about these potential benefits

  • You can have more life insurance benefits at a lower out-of-pocket cost.
  • With commercial premium financing, your other investments can grow while the lender funds the premium.
  • You could have income tax-free access to policy cash value for retirement or to meet other needs throughout your life.*
  • For estate planning, you can leverage your annual gift tax exclusions or lifetime exemption to protect and potentially increase the amount of wealth you pass on to your loved ones or favorite charity.


Learn more about commercial premium financing with this case study. (PDF)

*Distributions are taken through loans and withdrawals, which reduce a policy’s cash value and death benefit and may cause the policy to lapse. Loans are not considered income and are tax-free. Withdrawals and surrenders are tax-free up to your cost basis, provided your policy is not a modified endowment contract (MEC). A MEC policy is one in which the life insurance limits exceed certain high levels of premium or the cumulative premium payments exceed certain amounts specified under the Internal Revenue Code. For policies that are MECs, distributions during the life of the insured, including loans, are first treated as taxable to the extent of income in the contract, and an additional 10% federal income tax may apply for withdrawals made prior to age 59½.