CASE STUDY
‘Key Man Insurance’
Our client Mr. AA (aged 33, an Arab) is the CEO of a UAE based company. He recently took over the reins from his father who retired after being a first generation entrepreneur for over 30 years. His company has a long standing banking relationship with a local bank. The banker has requested collateral for the liabilities that Mr. AA’s company owes the bank, through a life insurance policy on the life of the CEO. A traditional policy would require a large premium payment to be made every year.
The Jumbo Life solution was the best option for Mr. AA. It is designed exclusively for high net worth (HNW) and ultra-high net worth (UHNW) individuals. Mr. AA fits the description of an UHNW.
The highlights of the policy are as follows:
• Lowest cost of Insurance
• Guaranteed Whole of Life Cover
• Single or Multiple …show more content…
Alternatively, upon the repayment of the US$ 6 Million loan to the bank, the collateral gets released back to the client’s company.
When Mr. AA retires at age 65, there is likely to be US$ 16 Million fund value in the Jumbo Life policy. A partial encashment from the policy of US$ 6 Million can repay the bank loan in full and provide a retirement fund of US$ 10 Million for Mr. AA with the life insurance (net of the encashment value) still being in force.
In effect, the plan not only takes care of the liability of Mr. AA’s company but would also ensure a leveraged return of over 13% on the collateral amount invested with the bank. The life insurance is virtually free of cost. (Illustration enclosed)
‘Key Man Insurance’
Our client Mr. AA (aged 33, an Arab) is the CEO of a UAE based company. He recently took over the reins from his father who retired after being a first generation entrepreneur for over 30 years. His company has a long standing banking relationship with a local bank. The banker has requested collateral for the liabilities that Mr. AA’s company owes the bank, through a life insurance policy on the life of the CEO. A traditional policy would require a large premium payment to be made every year.
The Jumbo Life solution was the best option for Mr. AA. It is designed exclusively for high net worth (HNW) and ultra-high net worth (UHNW) individuals. Mr. AA fits the description of an UHNW.
The highlights of the policy are as follows:
• Lowest cost of Insurance
• Guaranteed Whole of Life Cover
• Single or Multiple …show more content…
Alternatively, upon the repayment of the US$ 6 Million loan to the bank, the collateral gets released back to the client’s company.
When Mr. AA retires at age 65, there is likely to be US$ 16 Million fund value in the Jumbo Life policy. A partial encashment from the policy of US$ 6 Million can repay the bank loan in full and provide a retirement fund of US$ 10 Million for Mr. AA with the life insurance (net of the encashment value) still being in force.
In effect, the plan not only takes care of the liability of Mr. AA’s company but would also ensure a leveraged return of over 13% on the collateral amount invested with the bank. The life insurance is virtually free of cost. (Illustration enclosed)