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Investment Portfolio Diversification Using Whole Life Insurance as an Asset Class


A 40-year-old entrepreneurial investor with a net worth of $95 million was seeking portfolio diversification and protection for his family. He is an existing bank client with commercial real estate, stock and bond portfolio. He desired to accumulate significant liquid assets in a vehicle that was not correlated to real estate market cycles and volatility.

The client wanted an efficient vehicle to hold future liquidity from the sale of real estate assets as his risk profile was changing as he neared his retirement age. He was also concerned about liquidity in retirement and he desired to accumulate significant assets in a tax-efficient manner.

High Early Cash Value Contract:

$43M Additional Coverage for Spouse

This client already had a sizeable life insurance portfolio on his own life for the benefit of his wife and children. Due to recent changes in his health rating, it was decided to take advantage of his wife’s exceptional health rating in order to maximize cash value accumulation within the structure. That’s when the High Early Cash Value (HECV) solution came into play, allowing the client to take advantage of this smart credit strategy while minimizing out-of-pocket pledging of collateral.

In this $43 million HECV contract, the client only pledged $130k as collateral and was able to finance the premium of $978k with the policy’s $933k cash value from day one. The client was concerned about his legacy’s exposure to future estate tax. The cash value in Whole Life Insurance provides a solution to create liquidity in case of loss of income, and the survivorship benefit is designed to ease the family’s financial concerns in the event of premature passing.

This strategy is designed for individuals who want to hedge their portfolio against bond duration risk and market volatility while maintaining maximum liquidity and opportunity cost on their money. The concept is a tax efficient vehicle, which provides liquidity in retirement and protection for family in case the unexpected occurs.


A financial advisor worked together with ARI to find the right solution for his long-time existing client. The advisor’s understanding of credit strategies and the client’s needs was paramount in getting the message across and increasing the family’s coverage, as well as providing the client with much needed portfolio diversification using whole life insurance as an asset class.

ARI Financial Group optimizes and customizes different aspects of the contract depending on each client’s needs. Contact us at for more information on how we can help your clients grow and conserve wealth through personalized service and innovative planning.

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