Historically, leverage has been a financial strategy used exclusively by the ultra-wealthy.  With leverage, capital is borrowed for an investment with the expectation that the return on investment will be greater than the cost of the loan.

  • Using a loan to buy a bigger house
  • Purchasing an investment property to rent or flip
  • Expanding a business using a loan without tying up your cash flow

Put another way, you purchase items today using loans with the hope that they will appreciate in value.  This also allows you to enjoy more, sooner, and for a longer period of time.  While most people use leverage to expand a business, finance a bigger house, or purchase an investment property, NIW uses the same concept but with life insurance.  Using leverage maximizes the growth potential in your policy so that you can enjoy more protections. When designed correctly, cash accumulation in the policy eventually exceeds the cost of borrowing.

The biggest challenge to this investment strategy is the risk involved with borrowing.  That is why NIW works to minimize risk across all its platforms.  For example, with Kai-Zen and Tri-Zen the policy is the only collateral for the loan,  you do not have to sign any loan documents, and the bank does not require any personal guarantees.  This means that you can enjoy all the added benefits of leverage without the added risk.

For additional information, read the full explanation here.