Insurance-Backed Line of Credit (IBLOC) for Corporate-Owned Life Insurance

Business financing based on life insurance assets.

With an IBLOC for Corporate-Owned Life Insurance (COLI), businesses can access an interest-only revolving line of credit to manage current or future liquidity needs.1,2 An automated application process and timely funding also make the IBLOC a “go-to” source of liquidity.

Credit Limit:

Up to 95% of the cash value of an eligible whole life insurance policy with a minimum credit line of $200,000.3-5

Flexible Terms and Conditions:

Available to entities (no income verification), can be based on multiple whole life insurance policies7, competitive rates and terms, no application fees or closing costs8, easily request credit limit increases.9

1. Policy must be in effect for at least 12 months at the time of credit application. Line of credit is contingent on life insurance policy remaining in good standing. The insurance policy owner must be the borrower. Insurance policy must be issued by one of the following approved insurance providers to be eligible as IBLOC collateral: Guardian, MassMutual, Northwestern Mutual, NY Life, John Hancock, Penn Mutual, Ameritas Life Insurance Corp, Security Mutual Life. There may be an adverse tax consequence to clients pledging the policy and as such, we strongly advise consulting with a tax advisor before pledging the policy as collateral for a loan.

2. Owners of 25% or more of the equity interest of the legal entity are required to provide The Bancorp Bank, N.A. (“Bank”) with a personal guarantee. In addition, the IBLOC applicant authorizes the Bank or anyone authorized by the Bank to make any and all inquiries regarding creditworthiness, including credit reports and other reports as the Bank deems necessary or advisable to verify the accuracy of the information in the application and determine applicant's creditworthiness. See application and account documents for details.

3. Subject to credit approval and underwriting.

4. Collateral Lending Value is an amount equal to the sum of the then cash surrender value of the policy to which the pledgor is entitled, multiplied by such percentage as The Bancorp Bank, N.A. ("Bank") may determine in its discretion, not to exceed ninety-five percent (95%).

5. Minimum requested amount must be $200,000.00 or such greater amount as may be prescribed from time to time pursuant to 12 C.F.R. Section 1026.3(b) of Regulation Z issued by the Consumer Financial Protection Bureau as the minimum threshold necessary to qualify the Line of Credit as an exempt consumer credit transaction thereunder.

6. An IBLOC cannot be used for the purchase of securities or to pay off a margin loan that was used to purchase securities.

7. The insurance policy owner must be the borrower.

8. The Bank does not charge an application fee. State, local and/or third-party fees may apply in some states.

9. No credit limit increase is permitted within one-hundred-eighty (180) calendar days of the loan origination date. Maximum number of credit line increases is two (2) within a twelve-month period. Other terms apply.

Potential Uses

city icon  Real estate investment

hammer icon  Business improvements

pie chart icon  Business investments/costs

arrows inward icon  Debt consolidation

form icon  Taxes

check icon  Other liquidity needs6

Securities-Backed Line of Credit (SBLOC)

An SBLOC is a low-cost alternative to traditional loans when liquidity needs arise.

Learn more

Insurance-Backed Line of Credit (IBLOC)

The IBLOC provides funding based on the cash value of select whole life insurance policies.

Learn more

Transition Services

Transition Services help financial professionals retain client relationships and assets under management when starting an independent practice.

Learn more