Loans Collateralized by Life Insurance Policies

1 . One or more computer-readable storage media comprising computer-executable instructions that, when executed perform acts comprising:

calculating an interest rate for a loan to fund premiums of a life insurance policy on an individual; and,

allowing an entity to buy down the interest rate by paying a lump sum.

2 . The computer-readable storage media of claim 1 , wherein the calculating comprises calculating the interest rate, and at least one alternative interest rate associated with the lump sum buy down.

3 . The computer-readable storage media of claim 1 , wherein the allowing comprises allowing an entity to buy down the interest rate for one of: a life of the loan and a predetermined period.

4 . The computer-readable storage media of claim 1 , wherein the allowing comprises one of: allowing an entity to buy down a number of points of the interest rate to reduce the interest rate and allowing an entity to buy down a number of points sufficient to eliminate the interest rate.

5 . The computer-readable storage media of claim 1 , wherein the allowing an entity comprises allowing the individual to buy down the interest rate.

6 . The computer-readable storage media of claim 1 , wherein in an instance where the individual has established an irrevocable life insurance trust (IT), the allowing an entity comprises allowing one or more of: the individual and the IT to buy down the interest rate.

7 . The computer-readable storage media of claim 6 , further comprising periodically charging a trustee fee against the IT.

8 . The computer-readable storage media of claim 1 , further comprising verifying an existence of the life insurance policy.

9 . The computer-readable storage media of claim 1 , further comprising monitoring a value of the life insurance policy.

10 . The computer-readable storage media of claim 9 , further comprising, in an instance where said monitoring determines that the value is below a predetermined variation margin, then requesting additional collateral for the loan.

11 . The computer-readable storage media of claim 10 , further comprising in an instance where the requested additional collateral is not received within a predefined period then placing the loan in default.

12 . The computer-readable storage media of claim 1 , further comprising charging an arrangement fee on the loan.

13 . The computer-readable storage media of claim 1 , further comprising charging disbursement fees toward undrawn amounts of periodic disbursements of the loan.

14 . The computer-readable storage media of claim 1 , further comprising charging a pre-payment penalty against undrawn principal of the loan.

15 . The computer-readable storage media of claim 1 , further comprising increasing the interest rate in at least some predefined instances where the loan is in default.

16 . A method, comprising:

calculating an interest rate for a loan to fund premiums due on a life insurance policy; and,

determining an alternative interest rate for an instance where a lump sum is paid on the loan; and,

causing the interest rate and the alternative interest rate to be formatted for presentation to a borrower.

17 . The method of claim 16 , wherein the calculating comprises one of: calculating an interest rate that is fixed for a duration of the loan and calculating an interest rate that includes a base rate and which can vary relative to the base rate.

18 . The method of claim 16 , wherein the causing comprises causing the interest rate and the alternative interest rate with the corresponding lump sum to be included on a loan offer document.

19 . The method of claim 16 , further comprising allowing the borrower to select between the interest rate and the alternative interest rate with the corresponding lump sum.

20 . A computing system configured to execute instructions directed to a method, comprising:

verifying an existence of a life insurance policy for an individual that issues to an irrevocable life insurance trust (IT);

calculating an interest rate for a loan to the IT wherein the loan is collateralized by the life insurance policy;

formalizing the loan; and,

allowing one of the individual and the IT to buy down the interest rate by paying a lump sum.

21 . The method of claim 20 , wherein the formalizing comprises presenting a listing of the interest rate and at least one alternative interest rate that reflects the rate buy down in a user-perceptible form.

22 . The method of claim 20 , wherein the formalizing comprises making the loan.

23 . The method of claim 20 , wherein the allowing comprises allowing the individual or the IT to buy down the loan for a period of less than a duration of the loan or an entire duration of the loan.

24 . The method of claim 23 , wherein the allowing occurs either before or after disbursement of funds of the loan.

25 . A computing system, comprising:

a rate calculation module for calculating an interest rate for a loan collateralized by a life insurance policy and for calculating at least one alternative interest rate for an instance where a lump sum is paid on the loan; and,

a presentation module for formatting the interest rate and the alternative interest rate for presentation to a borrower.