Yes. The receivables are not encumbered. Cash flow remains the same for the business except to the extent of the interest payment on the loan.
Back to top

The real downside is not taking advantage of the upside by using a very underutilized, vulnerable asset to create wealth in a safe, tax-advantaged manner. There is also the possibility that the long-term growth rate of return does not exceed the after-tax cost of the program. However, such a scenario would not have occurred over any extended period of time during the last 25 years. The long-term growth rate has consistently been advantageous over this period, given market rates of interest versus crediting rates applied to the products used to create the program.
Back to top

Because our economy is coming up from a 45 year low in interest rates, one should expect them to rise. It is with this in mind that the company uses products that are sensitive to economic cycles. These products have over a two decade crediting rate history of keeping pace with rising interest rates even though they may lag behind such interest rates for a short period of time, and are issued by some of the largest insurance companies in the world. It is most important to understand that the interest payment on any loan is simple interest; the crediting rate afforded the products is compounded growth. Therefore, even if the two rates are the same, the Magnifier Advantage Program will far exceed any interest paid on the loan.
Back to top

Yes. Most corporations are funding these obligations with term insurance, using corporate assets. Now it can be funded with cash value insurance and leverage, thereby reducing the actual overall expense to a fraction of what is currently being paid and allowing for a return on the money being spent.
Back to top

When one or more of the eligible executives (such as physicians in a practice) do not wish to participate, for whatever reasons (most likely age), the others in the group can implement the plan.
Back to top

A new partner would, in most cases, generate additional revenue/receivables. As these receivables increase, a new plan can be established for the new partner.
Back to top

Typically, nothing! In a very short period of time, the cash value of the life insurance, subject to the loan terms, exceeds the loan and the lender is not concerned with the amount of receivables; i.e. the cash value fully collateralizes the entire debt. Of course, the loan can also be amortized, for any amount, at any time, to match a decrease in receivables.
Back to top

At the time of retirement or when the business is being sold, the loan can be repaid with the proceeds of any receivables collected or from the proceeds of the sale. Once the loan is satisfied, the bank releases the secondary collateral and the insurance contract is free and clear to be used as a retirement fund.
Back to top

He/she can. However, accounts receivable financing is difficult and usually involves a deep discount in value and much higher interest rates. The terms we have negotiated are most favorable and unusual. Moreover, without the documents and agreements associated with the Magnifier Advantage Program, more than likely, most of the tax advantages of the plan would be eliminated. The end result could be that the client would have to pay income taxes at ordinary rates either on the money received as a result of financing the receivables or on the growth received subsequently from any investment made with this money.
Back to top

Yes. Our program is completely flexible, whereas a qualified pension plan is not, as distributions must not begin prior to age 59½ and required minimum distributions must begin by age 70½.
Back to top

The Magnifier Advantage Program can always be implemented with a deferred annuity as the funding vehicle, thereby allowing for tax deferred growth and state specific creditor protection.
Back to top

No. Depending upon the implementation method, the Magnifier Advantage Program can be used by sole proprietors, partners, within an "S" corporation, within a "C" corporation, within a LLC and within a professional corporation.
Back to top

Yes. In fact, updated research states that the insurance can be put into an ILET as long as the Trustee recognizes the collateral assignment of the cash value up to the amount of the loan. The trust should not be established as a "donor trust."
Back to top

No. Money may be withdrawn and then borrowed, tax-free, from the cash value of the contract over different distribution periods. The contract is flexible; however, to avoid taxation on the money borrowed, the insurance policy must remain in force.
Back to top

Yes, as long as there is not too wide an age discrepancy between spouses. A second to die insurance contract could be more efficient and may provide a greater cash value accumulation.
Back to top

Yes to both questions. The tax advantages of using a life insurance contract, the financial leverage, and the large cash value accumulation created to supplement retirement, which can be "distributed" not subject to income taxes, allows the program to stand on its own economic merits.
Back to top

When the personal loan method is used to implement the Magnifier Advantage Program, there are no legal issues involved; all of the tax codes and insurance statutes relied upon to establish the plan have been existence for over 75 years.
Back to top

Yes, the program certainly applies to any business that meets the following criteria:

a. The business has receivables/assets to pledge to the lender in order to secure a business loan.

b. The business has a definitive desire to create tax-advantaged wealth and/or asset protection utilizing leverage of assets versus the assets themselves.

Back to top

The lender will charge a minimal underwriting/loan fee (state mandated) to process the loan. If the client requires the services of an attorney to specifically prepare the documents that we have the templates for, or to handle a closing, it is assumed your lawyer will charge you a fee. However, our company, at this point in time, levies no specific fees to establish or maintain the program. However, we reserve the right to charge an annual administration fee for new business in the future; (i.e. any current client will be exempt from that charge).
Back to top