The Advanced Markets unit of John Hancock has introduced a new JH Solutions that offers clients to pay life insurance premiums with arbitrage.

In this model, clients can take advantage of historically low insurance rates and use arbitrage to pay premiums on an Irrevocable Life Insurance Trust (ILIT).

John Hancock Advanced Markets Group vice president Randy Zipse said that for clients who have an asset that is producing a return that exceeds present low interest rates, using arbitrage to pay premiums may offer them a way to fund an Irrevocable Life Insurance Trust while minimizing taxes.

The insurer said the paying premiums with arbitrage module in JH Solutions is a new and illustrates in a simple format the benefits of transferring an income producing asset, such as a family business interest, to a grantor trust in exchange for a fair market installment note while minimizing transfer tax.

Arbitrage is the practice of taking advantage of a price difference between two or more markets.

JH Solutions is a new concept illustration software that uses summaries, flowcharts, and graphs to help producers familiarize clients with planning options on a conceptual level.

The Advanced Markets Group is comprised of attorneys, accountants and consultants supporting producers nationwide on the complex business insurance and estate planning cases with customized case design support and consultation and advanced planning tools.

John Hancock Financial is a unit of Manulife Financial Corporation, a Canadian-based financial services group serving customers in 22 countries and territories worldwide.