Bell Banker Builds Niche in Life Insurance Trust Lending

Lloyd Nelsen was in high school when he decided he would be perfectly happy to work an indoor desk job the rest of his life. He’d been working at a lumber yard, and on a 7-below-zero day, his foot froze. It wasn’t frostbitten, but to this day, if his foot gets cold – it hurts! 

Now a senior vice president and Twin Cities private banking manager for Bell Bank – and typically working indoors where his feet won’t freeze! – Lloyd leads Bell’s Twin Cities private banking team and builds banking relationships with affluent people who can benefit from his expertise when it comes to their finances. If clients need additional banking services, such as commercial loans for their business or home mortgages, Lloyd connects them with the right experts.

What’s especially unique about the work Lloyd does is he is deeply experienced in lending to life insurance trusts. This type of lending is not something many bankers do – or many people understand – but over the last 15 years, Lloyd has built a niche lending to life insurance trusts.

How it works is the life insurance trust itself is both the policy owner and borrower. A loan can be used to pay the premiums or as a line of credit secured by the policy.

“I was very fortunate, because I had a mentor who used to run premium financing for life insurance policies,” Lloyd remarks. “He was able to field all of my questions and helped me understand the policies, as well as any risks around lending through life insurance policies.”

Many high-net-worth individuals use life insurance as a significant investment asset in their overall investment portfolio.

“It’s a wonderful way for someone to transfer wealth to their beneficiaries without losing it all to taxes,” Lloyd explains. “I appreciate that the work I do really helps clients with their overall estate planning, and that often leads to other relationships with the bank. It’s a nice introduction into Bell’s private banking suite of services, which includes wealth management* and trust services.”

The life insurance policy is sort of like a large savings account, in the sense that each year the death benefit continues to grow, but ideally that benefit grows a bit faster than the interest on a loan, and when the policy owner dies, the policy matures.

For example, if you have a $10 million loan on a policy with a death benefit of $25 million, after your death, the loan is paid off and your beneficiaries receive the remaining $15 million.

A vast majority of people have term life insurance policies, which pay a death benefit if the insured person dies within a set period of time. Lending to life insurance trusts involves whole or universal life insurance, both of which include investment savings pieces and pay a death benefit no matter when the insured person dies.

The key to successfully obtaining a loan through a life insurance trust is to work with a banker who fully understands the process. It is also important to have a trusted life insurance agent who can map out how the policy will grow and will act as a shepherd for the client.

“Good life insurance policies are not sold, they are designed specifically for clients and their individual circumstances,” Lloyd affirms. “The insurance agent works as an intermediary between the bank and client, so I have to be able to trust that the agent is working for the best interest of the client.”


Finding His Calling

Originally from Creighton, Neb., Lloyd earned an accounting degree and his Certified Public Accountant designation from Southwest Minnesota State University, before launching his banking career right out of college.

“I’ve always liked working with numbers and finance, because 2 plus 2 is always 4,” Lloyd comments. “Once you become more seasoned, you can see behind the numbers and how they relate to how people live – they can tell you a lot about a person. Working mostly with people of affluence, what I’ve found is they’re always trying to do the right thing. When they have a family, they try to teach their kids middle-class values. They don’t want their kids to be overwhelmed by wealth – they want them to be positive, working individuals in society.”

Lloyd started working as a credit exam officer before moving into private banking – where he’s worked for more than 30 years. Working at U.S. Bank for 21 years, Lloyd managed the family wealth and corporate executives divisions of the private banking department. He has also worked as head of Minnesota banking for Northern Trust and as an executive director with J.P. Morgan.

“I enjoy finding solutions and being resourceful,” Lloyd says. “Clients appreciate when I can see things that help them financially. It’s a very rewarding career.”


Making a Difference

Outside of work, Lloyd spends a lot of time volunteering at the Hennepin County Corrections Work House. He has taught weekly Christian Bible study at the medium security prison since March of 1996. Until the COVID-19 pandemic temporarily suspended lessons, Lloyd would often teach 30 to 50 men every Friday night.

“It changes lives for a lot of folks,” Lloyd remarks. “I’ve had people approach me in the skyway downtown, and they’d tell me they were no longer drinking or doing drugs, they were no longer abusive and had gotten married and were holding a job. It changes the desires of the heart. They often just need some leadership to say, ‘You can get out of this.’ Most people are there less than a year, and by going every Friday night, I would just reinforce that message.”

When Lloyd joined Bell Bank in 2013, it was only the fourth bank he’d worked at throughout his career. He had always worked at large, national banks, but when he learned about how Bell operates, he readily switched.

“Bell is a wonderful place to work and do business,” Lloyd notes. “I wish I had come here sooner.”

To connect with Lloyd on how he might be able to help you, email or call 952-905-5025.


*Products and services offered through Bell Bank Wealth Management are: Not FDIC insured | May lose value | Not financial institution guaranteed | Not a deposit | Not insured by any federal government agency