Premium financing is the ability to borrow yearly against one's whole life policy. One will approach different banking institutions who will collaterally assign this insurance policy just like a mortgage or any other loan. The institution will then make payments on one's behalf (e.g. for 10 to 15 years) as a ‘limited pay whole life’ while being listed as the beneficiary. So once can pay in a total of $100K over whatever period is agreed upon (e.g. 10-15 years).
The bank will say “We’ll pay $100K for the policy because that's the premium every year.” – including the monthly interest-only payment on the loan based the agreed interest rate.
Scaled up, one can borrow $100K the first year at 5% interest, the second year one borrows another $100K, so $200K total, so on and so forth. Now, one must provide collateral (cash) for the difference between how much money the bank is owed versus how much money is in the cash value of the policy. Once this is done, the policy's cash value will continually grow faster and faster and faster, until eventually one sees the cash value is larger in the policy than what's owed to the bank. So, the actual consumer has zero collateral requirements outside the initial difference in the policy's cash value. Of course, the collateral assignment and dividends on the full amount go to the bank but the policy's cash value will eventually outgrow this amount and result in net earnings.
For example, at the end of 12 years imagine one puts $3M into this account. The bank is paid off for the policy until it is fully paid. For the first 2-4 years, one may not have the cash flow to be able to support paying all 100K a year because we want to NOT touch any funds in the policy for as long as possible. So the longer one stretches the strategy (e.g. 2-4 years), one can then start borrowing from the policy. Those who wait 5-7 years allow these policies to grow enough liquidity to have it more efficiently provide a nest egg with monthly dividends to support virtually everyone in their end years.
If one has built their HELOC and have $200K in equity, it is best to redirect the funds to cover the Whole Life Insurance policy premium instead of the bank covering it. That's the best option when one wants to avoid utilizing premium financing. This is what we teach inside of the course. Once one starts opening their mind to these opportunities, because one has liquidity and a cash flow, it will dawn on most that these 'opportunities' come around virtually every week.