IBLOC 101: Insurance-Backed Lines of Credit

However, because of its low-risk properties, clients tend to use IBLOCs for fast liquidity needs like real estate, taxes, student loans, and more.

Anecdotally, we often see most clients using this type of loan for real estate purposes in particular.

This is because IBLOCs have the most potential in this use case due to the significant savings it can offer since there are no unexpected costs like ancillary fees or pre-payment penalties.

What are the benefits of an IBLOC for financial professionals and agents?

While the benefits of IBLOCs might be obvious for your clients because of the quick access to liquidity, there are also lesser known benefits for the financial professionals and agents offering this option.

By making clients aware of IBLOC offerings, financial professionals can continue to build clients’ confidence in their strategic advice by showing them a straightforward and low-cost way to access money in their whole life insurance policies.

By adding IBLOC to their lending options, financial professionals can further diversify their offerings and, in some ways, become a more sophisticated advisor without additional licensing.

Managing long-term financial goals can be a difficult task for both individuals and the financial professionals managing their portfolios, especially when access to liquidity is needed fast during times of uncertainty in the market.

With this in mind, financial professionals and agents should consider recommending that clients explore IBLOC as an easy, flexible option when it comes to larger purchases or other financial obligations.

Abdullah Rajput is director and IBLOC lead at The Bancorp Bank.

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(Image: Diego M. Radzinschi/ALM)