National Insurance Corp. (affiliated with National Securities Corporation via our parent company, National Holdings) offers a myriad of insurance products for its clients, including Variable Annuities and Variable Life (offered through National Securities Corporation) and Fixed Insurance; Fixed Annuities Products, Life, Disability and Long Term Care Products (offered through National Insurance Corporation). National’s Insurance Department is able to write all top companies for Variable and Fixed Insurance Products. Through its direct selling agreements with insurance companies and its relationships with several insurance wholesalers, National can offer clients insurance products with all of the major insurance companies as well as some smaller ones. Companies including, but certainly not limited to: Allianz; AXA, Genworth, ING, Jackson National, John Hancock, Lincoln, MetLife, Pacific Life, and Prudential. We are licensed in most states and can obtain other state licenses as needed.
Benefits Of National Insurance
- True one-stop brokerage services
- Selection of the highest rated providers
- Technical and Legal support
- Jumbo case underwriting expertise
- Impaired risk specialist
- Direct contracts with Insurance providers
National Insurance represents only the highest rated insurance carriers providing a full range of fixed and variable annuities and insurance, long term care and disability. Our primary objective is to provide you and your client with unique product solutions to meet their financial objectives while maximizing your profitability.
- Variable Annuities - Variable annuities are long-term investment vehicles that provide income varying from payment-to-payment based on the performance of the underlying investments. They're designed to help offset the effects of inflation. The variable sub accounts are subject to market risks, including fluctuating returns and possible loss of principal; therefore, your investment, when redeemed, may be worth more or less than the original cost. Withdrawals prior to age 59 1/2 are fully taxable and may be subject to a 10-percent IRS penalty. Early withdrawals may be subject to additional fees. Withdrawals after 59 1/2 are generally taxed at ordinary income rates with no additional IRS penalties. Variable annuities enable you to invest in a selection of portfolios, called sub-accounts. Choices range from the most conservative, such as money market, guaranteed fixed accounts, and government bond funds, to more aggressive such as small cap, mid cap, large cap, and emerging markets investments. Some have as many as sixty or more investment choices with fifteen or more managers, and allow you to switch between them at no cost and without tax consequences (although excessive changes to your contract could result in the imposition of a small fee, so be sure to consult your financial planner or prospectus if you plan to make frequent changes.)
- Fixed Index Annuities - A fixed-indexed annuity (FIA), is similar to other annuities. You pay premiums in a lump sum or periodically, and the issuer promises to pay you some amount in the future. With a fixed-indexed annuity, the interest earnings are tied to the performance of a fixed index. The FIA issuer also provides a minimum guaranteed interest rate on your premiums paid. With an FIA, your interest earnings may increase if the market performs well, but if the market performs poorly, your principal still earns a minimum interest rate, according to the terms of the annuity contract.Fixed-index annuity investments are determined by computing the difference between the value of the index to which the annuity was linked on the annuity's issue date and the value of the same index on the annuity's maturity date. If the difference is negative (i.e., the market performed poorly and the value of the index decreased), interest is calculated using the minimum rate guaranteed by the issuer. If the difference is positive (i.e., the market performed well and the value of the index increased), the interest rate used is a percentage of the difference-- but usually not the entire difference.Unlike variable annuities where the buyer's money is directly invested in sub account portfolios, buyers of Fixed-indexed annuities s are not directly invested in the index or the equities comprising the index. The index is merely the instrument used to measure the gain or loss in the market, and that measurement is used to calculate the interest rate. A fixed index represents the total dollar value of the stocks or bonds of the companies comprising the index.
Note however, that any return, whether guaranteed or not, is only as good as the insurance company that offers it. Both the Fixed-index annuity’s principal and its earnings are entirely dependent on the insurer's ability to meet its financial obligations.
- Fixed Annuities - Fixed annuities provide income payments in fixed amounts, which can help you pay expenses during retirement. Payments are determined by the annuity contract. Fixed annuities offer more conservative investors a safe and steady way to grow assets at a fixed rate of interest tax deferred. The issuer of the annuity guarantees that a minimum rate of interest will be paid but the actual rate of interest credited to the annuity is typically higher than the guaranteed rate. All of the premium payments that you make to the issuer will then compound (tax deferred) at least at the guaranteed rate of return, subject to the claims-paying ability of the annuity issuer.
- Life Insurance - Life insurance can help you protect the financial security of your family in the event of your death.
- Whole Life Insurance - Whole life insurance offers a death benefit and also accumulates cash value, tax deferred at fixed interest rates. Whole life insurance policies generally have a fixed annual premium that does not rise over the duration of the policy. Whole life insurance is also referred to as "ordinary" or "straight" life insurance.
- Universal Life Insurance - Universal life insurance combines a death benefit with a savings element, which accumulates tax-deferred at current interest rates. Under a universal life insurance policy, the policyholder can increase or decrease his or her coverage, with limitations, without purchasing a new policy.
- Variable Universal Life Insurance - Variable universal life insurance combines a death benefit with a savings element that accumulates tax deferred. Under a variable universal life insurance policy, the cash value in the policy can be placed in a variety of sub-accounts with different investment objectives and risk profiles. The policyholder can transfer funds among the sub accounts as he or she wishes. Transfer fees are charged after a certain number of transfers. Other fees will also apply to such policies, including mortality and expense risk charges, administrative fees, contract fees and management fees for the underlying investment options. The variable sub-accounts are subject to market risk, including fluctuating returns and possible loss of principal; therefore, the cash value may be worth more or less than the original investment.
- Term Insurance - Term life insurance provides a death benefit when the insured dies. Term insurance does not accumulate cash value and ends after a certain number of years or at a certain age.
- Disability Insurance - Disability insurance can provide income for you and your family when you're unable to work because of a short-term or long-term disability.
- Long-Term Care Insurance - Long-term care insurance can help you pay for long-term healthcare expenses while preserving your retirement savings and other assets from the high costs of long-term care.
High Net Worth Premium Finance
Forte Capital Group High Net Worth Premium finance allows people with high net worth to purchase life insurance without liquidating other profitable investments or otherwise changing their normal cash flow situation. Through this innovative financial arrangement, qualified clients borrow the funds to pay the life insurance premiums. They protect the net worth they have built up and pass their financial legacy to future generations.
Eligibility for Premium Financing
Because of its complexity, premium financing is not for everyone. If you have financially sophisticated clients with skilled tax and legal advisors, this strategy may be appropriate for them. Also, your clients must meet certain eligibility requirements.
To qualify for a premium financing arrangement, clients should demonstrate the following:
- A need for life insurance.
- Have a minimum net worth of $5,000,000 ($10,000,000 preferable) or more.
- Have verifiable annual income in of $200,000 or more.
- Have liquid assets sufficient to pledge as collateral for the loan.
- Meet life insurance policy underwriting guidelines.
- Commit to at least $1,000,000 in loans to provide premium.
How Premium Financing Works
The premium finance concept is simple. Your client borrows money to pay life insurance premiums. The actual transaction itself can be quite complex. For that reason, it is crucial to involve legal and tax advisors in the process. While each premium finance transaction is unique, every transaction consists of two separate financial instruments; a permanent cash value life insurance policy and a loan. The process occurs in two steps.
The Life Insurance Policy
The initial life insurance application process is similar to any other life insurance application. The life insurance company will complete medical and financial underwriting to determine if your client qualifies for coverage.
The Loan Application
After the policy is approved, a loan application is submitted to the lender for approval. The lender will review your client's credit and financial status and decide whether or not to make the premium loans.
Once loan approval occurs, your client's premium finance case is underway. The documents are then sent to your client's legal counsel to be executed and the policy is funded.
Legal and Tax Considerations
Premium financing has tax implication in a number of areas including estate, gift, and income taxes. Your clients must rely on their own legal and tax advisors to review and explain the legal and tax issues for their specific case.
Small Case Premium Finance
Forte Capital Group provides Premium Finance strategies as an economical approach to purchasing life insurance for protection needs and retirement and estate planning. It uses the power of leverage to significantly increase your client’s buying power.
Our new “No Additional Collateral” program was designed specifically with the smaller business owner in mind, and this program gives you the ability to introduce the concept of life insurance
premium financing to a significantly wider range of prospects than ever before.
The Small Case Platform offers qualifying business borrowers access to a full‐recourse commercial loan, the proceeds of which are used to fund premiums for a life insurance product from an approved carrier. The acceptable face amounts range from $1,000,000 to $4,000,000, with specific face amounts of $1mm, $2mm, $3mm or $4mm.
The insured must have a minimum annual income of $200,000 (proven by tax returns) and be less than 55 years old.
Interest payments on the loans begin immediately and the loan amortization begins in year 6. Amortization schedules are case specific.
There are no additional administrative costs and no trust formation required for SCP participants.
Participating businesses are given the opportunity to use their business to fully fund a life insurance policy with at least a face value of $1 million today – all while leaving more business assets free to work for them now!
This means SCP participants can quickly implement plans for:
- Estate Planning
- Key Person Policy Funding
- Buy/Sell Agreement Funding
- SERP Arrangements
- And many more life insurance based options
The SCP allows you to open up an entirely new world of planning options for your clients and prospects today.