Retaining Capital Through Premium Finance

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1 The following information is provided courtesy of Aurora Capital Alliance, Inc. Retaining Capital Through In this white paper: 1 Introduction: The missed opportunity 2 Criteria and structuring of our PFLI strategies 3 About us

2 Introduction: The Missed Opportunity Affluent individuals and their advisers understand the power of leverage - the power of retaining use of our own assets for investment purposes and leveraging a lender s capital. Aurora Capital (ACA) applies this strategy to a different asset class - life insurance. The ACA strategy provides advisers with the tools to allow their clients to obtain a significant cash-flow savings. ACA Program As a CFP Board certified CE educator and CA DOI educator on Retaining Capital Through, ACA assists advisers across the country. ACA educates advisers on the power of premium finance, how to obtain the most desirable loan rates, terms, strategy sheets for point-of-sale and the highest level of back office support, including annual servicing. In addition, ACA presents its premium finance strategy in a variety of methods - including the only Fee-Only premium finance strategy in the Country. This strategy allows Fee-Only advisers to capitalize on the power that premium finance can bring to their practice. Our Consulting Services ACA works closely with the advisor in case design, case structuring, and annual renewals. ACA either charges a fee for the structuring or shares in a portion of the case compensation - depending on ACA involvement in the case. Our goal is to educate advisers on the mechanics and benefits of life insurance premium financing. As an industry educator, we are held to the highest level of standards and integrity and demand the same from our Members. USING THE POWER OF THE ACA PROGRAMS IN YOUR FINANCIAL PLANS Thousands of advisers across the country are are underutilizing premium finance in their practice. They either do not understand the intricacies of a meticulously tailored premium finance strategy or are unaware to the current marketplace for premium finance. Partnering with ACA, advisers can maximize the potential that premium finance can bring to their practice. Fee-Only Program In addition to servicing hundreds of advisers across the Country in tradition premium finance, ACA has pioneered a Fee-Only approach. In this approach, ACA removes the commission from the underlying insurance chassis, creating an inherently more cost-effective approach, maximizing policy cash value accumulation potential and death benefit protection. ACA charges a fee for this structure, typically accruing this fee into the credit facility. ACA Members receive their portion of this fee pursuant to their Engagement Agreement. The only firm in the country to offer a true Fee-Only approach to premium finance

3 Criteria: Needs and wants permanent life insurance coverage Age 25 to 85 Has a minimum net worth of $5,000,000 Has liquid assets to post for collateral or can obtain a letter of credit on non-liquid assets (exit strategy) Understands interest rate risk Appreciates the value of leverage Insurance Chassis We Finance ACA assists producers in financing a wide array of insurance chassis, including indexed universal life, guaranteed universal life, whole life, term conversions, in-force financing and our fee-only insurance design concepts. Example Loan Structure: Yr Annual Finance Premium Cumulative Financed Premium Annual Interest Rate (30 Day LIBOR + Spread) Annual Interest Cost 1 $ 700,000 $ 700, % $ $ 700,000 $ 1,400, % $ $ 700,000 $ 2,100, % $ $ 700,000 $ 2,800, % $ $ 700,000 $ 3,500, % $ $ 3,500, % $ Determining Borrowing Rates ACA determines borrowing rates from a variety of factors, including but not limited to: Total credit facility, interest payment preferences, collateral type, insurance chassis design, exit strategy and client s level of liquidity. Our clients are able to achieve floating rate options (at low as 150bps), The above structure assumes a floating rate (30 day LIBOR + a fixed spread). ACA provides a wide array of options to hedge against a rising rate environment - from true bank fixed rates, swap rates to interest rate caps. ACA provides the option to capitalize a portion of the interest, reducing client out-of-pocket expense.

4 Aurora Capital Alliance is built upon a solid foundation of trusted advisors with decades of experience. Our proprietary software and planning concepts propel ACA to the leading edge of the industry, working with advisors across the nation. Our Services Working with Advisors across the Country Proprietary planning concepts and financing software Creative funding solutions Case Design Support Annual Renewal Support Pre-approval Process Scenario Scripts & Point-of-Sale material for Advisors About Us ACA is at the forefront of the premium finance industry. As a CA DOI educator and CFP Board educator, teaching courses on Retaining Capital Through and Retaining Capital Through Premium Finance - A Fee-Only Approach, advisers and their clients can rest assured that ACA will provide them the highest level of service and cutting edge industry knowledge. ACA is the first premium finance consulting firm to provide advisers and their clients with true Fee-Only premium finance, as seen published in our article in LifeHealthPro entitled How to Remove the Greed from. San Diego Office Emerald Plaza Scottsdale Office Fashion Square 7150 E Camelback Road Suite #444 Scottsdale, AZ Los Angeles Office US Bank Tower 633 West Fifth Street 28th Floor Los Angeles, CA 90071

5 Disclosures Copyright 2014 Aurora Capital Alliance, Inc. This material is for producer use only. Not for use with the public. This material was not intended or written to be used, and cannot be used to avoid penalties imposed untie the Internal Revenue Code. This material was written to support the promotion or marketing of pro cuts, services, and/ or concepts addressed in the material. Aurora Capital Alliance, Inc. ph PLAN ph fax web. San Diego Office Emerald Plaza (Preferred Mailing Scottsdale Office Fashion Square 7150 E Camelback Road Suite #444 Scottsdale, AZ Los Angeles Office US Bank Tower 633 West Fifth Street 28th Floor Los Angeles, CA 90071