“It’s like a blueprint for an insurance plan you’re doing,” Simmons says, referring to the demo. “It has to have all the pieces, but you also have to play with it to make it work, make it your own, make it different.”

Few musicians could draw an analogy between insurance planning and songwriting. Simmons, however, prides himself on being a Renaissance man.

He may be known as “The Demon” in Kiss, the hard rock band he co-founded in the early 1970s, with his iconic makeup and serpentine tongue, but Simmons is a dead serious businessman. He is co-founder of Cool Springs Life, an estate and insurance planning firm in Franklin, Tenn., that caters to people worth more than $20 million. He is a principal in Ortsbo, an online language translation company that garners 20 million unique users per month, according to its CEO. He is a partner in Simmons Abramson, a marketing company that among other things promotes the IndyCar races. He has his own record label, a publishing company and an online venture with Sony. There is also his coffeehouse and a new airport restaurant chain, a joint venture with Hello Kitty and he is the star of Family Jewels, the longest-running celebrity reality show.

So what makes Gene Simmons tick? That’s what I’ve come to discover as I pull through the massive gate that leads to his house halfway up one of the more esteemed streets in this ZIP code. The driveway winds around to a carport. And Simmons is there to greet, standing atop the stairs that lead to the front door. He is wearing dark sunglasses, a black suit and a black shirt. No tie.

I had tailed another car on the way in-one of Simmons’ business associates. Two other business associates apparently have also just arrived, and Simmons waves to us all and then disappears inside.

The manse is highly organized and attended to. Floral arrangements and framed family pictures greet you. Simmons recently wed his longtime partner Shannon Tweed, the mother of his two children. To the right of the entranceway is a grand piano. The color scheme for the heavy furniture, drapes and rugs atop the dark, wood floors is mustard. Everything is just so: the leather-bound books that line the mezzanine bookshelves, the expensive-looking vases, the tea and coffee set that a uniformed house worker sets down for those gathered. The house could, in fact, be mistaken for your wealthy aunt’s Connecticut estate.

Simmons is seated in a plush chair underneath a rotunda and stained-glass skylight in the center of the living room. His three business associates have gathered around him and lean in to sap up the story Simmons is regaling us with. He talks about a recent trip to Israel, and how much things have changed in that country since he was born there. Gene Simmons was born Chaim Weitz in Haifa.

“Even the [slang] name for money has changed there,” Simmons says. The comment is the first sign of skin that has shown through the performance mask he is wearing as storyteller. It reveals his personal interest in finance and business.

Gene Simmons, the real Gene Simmons, the man who doesn’t drink, smoke or take a vacation, has a single-minded focus. Money isn’t it. Rather, it’s the pursuit of money that intrigues Simmons. His philosophy is distinctly about not being linear, and not having any type of theme to his life. This shotgun blast mentality may seem scattered to some. Still, Simmons is absolutely militant and passionate about not fitting in.

“Why should I?” he asks. “Not everyone is a specialist. In the Renaissance period, which was the first real enlightenment of knowledge, your barber was your dentist. Did you know that? That little swirling red sign was [a symbol of] blood.”

It’s these little kernels of knowledge that slip out of Simmons’ mouth and which, at various times, make him seem learned, charming, funny or-when he drones on a bit-pedantic.

Wrap it all up and you have Gene Simmons’ “Rich and Famous,” a public speaking program he developed for the self-help crowd. There isn’t much about himself-if anything-that Simmons hasn’t found a way to exploit. There is even a KISS-branded urinal cake that speaks his voice when it gets wet.
“The idea that because I strum a guitar onstage and stick my tongue out is my end-all-and-be-all is a little short-sighted, if you know what I mean,” Simmons says. “I invest in myself.”

Urinal cakes and public speaking are one thing. But advising high-net-worth individuals on their sophisticated estate planning issues and discussing obtuse financial vehicles and strategies as a business is entirely something else. The latter requires a degree of education and understanding that goes beyond street smarts and general marketing prowess. The intricacies of collateralized loans, fiduciary responsibility and actuarial tables are de rigueur in the world of ultra-high-net-worth life insurance. Moreover, it sounds about as exciting as warm oatmeal compared to being onstage and rockin’ a crowd of thousands.

The obvious question of why he got into the insurance business when he has so much else going on has to be asked. Before Simmons answers, he leads me to his office at the back of the house. Actually, it looks less like an office than a souvenir store you’d find in Times Square or on the Sunset Strip. Glass cases hold thousands of items, from KISS dolls to books to logoed jackets, costumes, masks, boots-and the piece de resistance: a coffin emblazoned with the KISS insignia.

Simmons takes his place behind his desk, which is littered with more KISS products as well as magazines that have featured him-even an obscure trade magazine with his photo on the cover. He jumps right into the interview.

“What the hell am I doing with these good-looking guys?” Simmons asks, referring to Sam Watson, Simon Baitler and David Carpenter, his associates in Cool Springs Life. I notice he has discreetly placed a Cool Springs brochure on the desk, which rests under my tape recorder. (He tells me he designed the brochure’s logo, the symbol of the god Apollo.)

Simmons isn’t a guy who gets to the point easily. He likes diatribes, and layers in thoughts and information. He is like a comedian who riffs, attaching words and making random associations. He wants to make you feel something when he speaks. He doesn’t directly answer questions so much as he tells stories about himself. He is his own central character. And he prefers fables, exacting any bit of morality he can.

Simmons answers the question of why he co-founded Cool Springs Life in his own inimitable manner, with dashes of philosophy, business-speak and jocularity.

“The history of [Cool Springs Life] is that Rich Abramson [his partner in his marketing company] and I and two other gentlemen no longer involved were doing something at Credit Suisse-a financial product.” He declines to say what that product was because he says there was some question about whether it was “kosher.”

“You know, there’s a difference between legal and moral and ethical. Something can be legal and not necessarily moral or ethical.” He stops, then quips: “Michael Jackson, O.J. Simpson and all the rest … just kidding.”

“So we abandoned it,” he continues. “We didn’t think it was completely foolproof and both morally and ethically solid. There’s an interesting analogy an ethics professor once told me, which is that, you know, if you broadside a battleship and there’s a huge, gaping hole, the ship sinks. What happens if there is a little, pencil-sized hole in the ship? Nobody’s really going to say anything about it … but over time that little bit of water that gets in will sink the entire ship. So ethically and morally, it’s got to be sound. So we walked.

“But while we were talking with our friends at Credit Suisse, we bumped into Sam. We kept in touch with Sam. And within about a year or two we started to meet. And it was Sam who created the template, the blueprint of this really rather remarkable idea.”

Cool Springs’ simple concept is that it uses bank money at low interest rates to pay for the life insurance premiums of high-net-worth individuals who have started to find the payouts too costly. With a small commission and low borrowing costs, the firm says it can build cash faster within a tax-free policy construct. The loan can then be repaid from the savings and cash buildup within the policy, or at death out of estate proceeds.

“Grant you,” says Simmons, “this [vehicle] does not apply to everybody, but nothing applies to everybody, whether it’s health care or anything. The idea that certain high-net-worth individuals would never have to write another check again-a life equity strategy, minimizes your taxes, maximizes all sorts of benefits, and is actually a good idea for family, friends, yourself-clearly-and charity. And the results have been off the charts. People are thrilled with it.”

But still, one asks, what’s so appealing to a rock star about selling life insurance?

“I came to America from Israel as a little kid-I know I don’t look Swiss-and went to school, and early on realized that I wanted to act and sing and do everything that everybody else does in pop culture. In America, pop culture is our royalty. But I realized it wasn’t called ‘music’ or ‘show.’ It was show business or the music business. And it was my responsibility to do my own due diligence. I have an implied fiduciary duty to my own self.”

Personal responsibility and accountability are big hallmarks in Simmons’ mind. You have to take care of yourself. Period. End of story.

“When I was a little baby, my mother used to wipe my ass,” he says. “Well, one day that stopped. From then on, I had to do it myself. And so the real story is that it’s my responsibility to take care of not what I do onstage, but what I do offstage with the rewards of what happens on stage. I have a family. I have charities I am involved with. I don’t like writing checks. I suspect everybody is like me. And this [insurance] makes perfect sense.”

Simmons says personal experience got him involved in the high-net-worth life insurance business because he himself is a high-net-worth guy who needed life insurance. He took out a policy on his own estate and figured, well, there was a good business in it.

The stated minimum net worth for the type of Cool Springs Life insurance Simmons is speaking of is $20 million. He won’t give me a number when it comes to his own wealth. But he tells me he is a Cool Springs Life customer. So that is at least a floor.

Simmons gets into myriad businesses because he can. He is unabashedly driven. After my early morning interview with him, he received a visit from VH1 for a television interview and award-show planning, and then filmed his reality show for the A&E Network until midnight. You get the sense when you meet him that he really wants you to like him, that he is trying to prove something by getting you to like him, and that he is amazed at his own fortune and opportunity. He is like that person who has discovered something and beckons you over to see it, gushing, “Look what I found!”

His demeanor sours radically, however, when it comes to slackers and those who don’t take care of themselves. “You are responsible for yourself. I am a big believer in Ayn Rand’s philosophies,” he says. “When I first came to America, I used to go to the library every day after school. I couldn’t believe that all of the knowledge of mankind was available to somebody who [was] not even from America. So if I had access to all the knowledge that the rich and the powerful have, why is it anybody else’s responsibility for me to do well?”

He deems those that prey upon society’s goodwill to be “parasites.” Take drug addicts: “If you are a drug addict, you get six months to clean up. If you don’t, you’re up in Alaska, chopping wood away from civilization.”

The motif of self-responsibility plays throughout Simmons’ varied career and life. It’s something common among self-made businesspeople. Simmons immigrated to America from Israel when he was 8 years old. He is the only child of his mother, a Nazi concentration camp survivor. His father-whom he says he has supported over the years financially but from whom he is estranged-sired many other children with many other women. (Simmons, himself, famously claims to have bedded some 5,000 women.)

In any case, if a “failed human being” such as he can become a success, anyone can, he believes. He is an autodidact who speaks several languages, and he learned music on his own. His musical gift is especially apparent when, after hearing a song played once, he replays it-chord by chord.

But of all the things I discovered about Simmons, the thing that stood out most is how self aware he is. “My philosophy is dress British, act Yiddish,” he says.

Politically, Simmons now leans to the right, unsurprising given his belief in self-care, although he claims to have been an Obama supporter during the last presidential election. “A mistake,” he says.

In terms of any political aspirations of his own, the only position he’d want hasn’t been invented yet: “I would like to be the benevolent dictator of planet earth. And I mean that seriously. Whatever ails mankind, I would have to bring in Solomon’s wisdom and deal out swift and terrible justice,” Simmons says.

As wacky as he can get, Simmons is grounded in his belief in American opportunity. “I’m investing in America,” he boasts, “even now.”

The day I interviewed Simmons, the Dow Jones Industrial Average had tumbled hundreds of points. It followed another steep drop in the stock markets around the world, and anyone who had any money in the capital markets, if they were conscious of the events anyway, was jittery. Not Simmons. “I am buying,” he told me. “Aren’t you?” An opportunity had presented itself and Simmons, like a bee to honey, flew right to it, plunging in, stinger raised.

I asked him, “How much money is enough?” This gets a nice rise. “That’s a loser’s question,” he responds. “That’s like being a tightrope walker and asking what happens if I fall. You are contributing to your fall. The mind-set is there is no such thing as when it’s enough. In fact, you can’t fathom death. The idea is the winner always thinks, “Win, win, win, win, win,” and not “When is it enough?” And I don’t do bling or diamonds. I’m not really interested in it. But the game is really satisfying.”

Driving toward a goal and constantly shifting that goal is what keeps Simmons going. There is no room for excess, no tolerance for laggardness, no forgiveness for sin. Even when you don’t have money, you have money. (“That’s what flea markets are for.”) He says, “Instead of all the stupid things, I suggest you have a piggy bank. Anytime you have the money to buy that extra pair of shoes you don’t need, take that money and put it in the ‘I am going to invest in myself’ piggy bank. You’d be shocked at what you do. Because the old adage of a penny saved is a penny earned is actually incorrect at the highest tax bracket. It’s actually a penny saved is more like two pennies earned, because it’s after-tax dollars.”

This brings the conversation back to the insurance company again, and its raison d’être.

“I don’t sell life insurance. I am not an agent. We arrange for these loans. But the basic idea is still a sound one: No matter how old you are, no matter what you are doing in life, you must plan a life strategy for when things stop. Better not to write a check, because when you write one dollar for your life insurance premium, you have to make two, because we are assuming you are at the highest tax bracket. So we have some clients who are spending tens of millions of dollars every year in life insurance premiums … and of course you have to make twice that much. They are very well off. Well, what happens if you never have to write that check again? We don’t care if you want to give it all to charity, your family, whatever. If you’re never going to write a check again, you should be able to make, my guess would be, a few hundred basis points more just on the Street. In essence, it winds up being free life insurance,” Simmons says.

He knows better, of course. There is no free lunch. But he is performing, and the lyrics play well for the moment.

The most revealing quote he gives me is this: “I can connect with people. Ultimately, that’s the first step. When you first meet people you have to be able to connect on some level, emotionally, informationally, and that means the entire world is my playground.”

And boy is he playing well. He knows it, too. The last thing he wants is for the game to stop: “When you get successful it gets even harder to stay successful. Because the public is a moving target because we, the great unwashed masses, have the attention spans of gnats. Because we get pummeled by sights and sounds 24 hours a day because there are other things in our lives. Because we have relationships. Because we have fun. We go away. And our attention span wanders. So to be able to stay in your face has always been my philosophy. I sleep great. Food tastes great. And I am having a ball.”

Financing life insurance and estates means Simmons will linger in people’s lives long after they are dead and gone.

Perhaps that KISS-branded coffin in the back corner of his office is symbolic of something more, I think. I begin to ask, but his KISS-branded cell phone rings, and he spits in the KISS-branded garbage can next to his desk.

He tells me just before he answers, “You can buy it on eBay.”Insurance premiums without the checkSam Watson was in an odd predicament. The 30-year life insurance veteran from Tennessee had an ultra-high-net-worth client who had a policy, but didn’t want to pay for it cash out of hand.”The man was worth between $40, $50 million … but he didn’t want to write a check,” Watson recalls. “It really bothered him that the premiums were so large.”What to do?The annual premium cost of a policy to insure the man’s assets would run close to $1 million. To be sure, a big check to write.

Watson contemplated the situation. The man had the cash assets and collateral to cover the premium, just not the willingness to spend the money. “Then I thought about using banks to finance the policy,” Watson recalls. He says he called the head of a small bank in town. And he got the loan on the spot. “He did it on a signature loan. He didn’t even take the policy as collateral.”

That was a decade ago when banks were eager to lend. Watson was off and running, and the basic concept behind Cool Springs Life was born.

Cool Springs is a life insurance premium finance company targeting people with a net worth of $20 million or more. It’s based in Knoxville.

While Watson is the CEO and created the concept behind Cool Springs, he enlisted a more recognizable front man-a professional front man: Gene Simmons, co-founder of the rock band KISS.

The marketing machine behind Cool Springs includes KISS ticket giveaways and private lunches with Simmons to discuss insurance.

“In the 20 cities where KISS performed last year, we invited family offices, planting seeds,” says Rich Abramson, a Cool Springs co-founder and Simmons’ marketing partner in another venture. Abramson’s Cool Springs bio says he was the sole manager of the character “Pee-wee Herman.”

Infiltrating the ultra-high-net-worth world isn’t easy. And the entertainment backgrounds of both Simmons and Abramson seem, even sans smirk, unlikely fits for the clubby wealth market. Marketing and sales to the wealthy and wealth managers are soft approaches-chats on the golf course or cocktails at a fund-raiser. That’s how the network is fed. For this more staid approach, Watson brought in David Carpenter, the former CEO of TransAmerica, William Randolph, a senior partner in the law firm Gordon, Herlands, Randolph & Cox, and Simon Baitler, a longtime actuary, as co-founders.

Cool Springs’ concept is pretty simple-use bank money to pay for your life insurance premium, not your own. But the policy architecture is not as straightforward.
“We’ve got strategies for estate planning, for income replacement, for business debt, for key man insurance, for buy-sell agreements, for retirement funding. So depending upon how old the person is and what the strategy is, we have a structure,” Watson says.

A dedicated team of Cool Springs analysts rips apart every insurance policy on the market to find holes and opportunities. “We stress-test them. We look at their historical returns,” Watson says. The key is finding low interest rates and building as much cash as possible within the life insurance policy itself.

By charging a smaller commission-less than 40% versus the typical 100% of the first year’s premium-and by keeping borrowing costs low, Cool Springs claims it can build cash faster within a tax-free policy construct. The loan can then be repaid from the savings and cash buildup within the policy, or at death out of estate proceeds.
Cool Springs works with a number of banks to find the lowest possible interest rate to finance the policy premium. At the same time, it often opts to use index-based policies instead of general account policies to achieve higher returns within the policy itself.

An index policy pays a return point to point. In other words, if you put a dollar in that policy today, 12 months later it’s going to have a return the same as on the S&P 500. If the market rises 500 points, you gain five points. If it drops by that amount, you lose 5 points. It’s calculated on a year-to-year basis.
A general account product typically is where the insurance company invests in a bond, or an investable portfolio, and the firm keeps a spread for itself and credits the policy with the rest.

In essence, Cool Springs adds value by obtaining low interest rates and finding policies that can offer high returns.

Naturally, the question is, what if the opposite occurs during the policy’s life?

That’s the problem critics have with life insurance premium financing.

“The devil is in the details with these things. If you are buying a premium policy, you do not ever want to have market risk,” says Rick Raybin, principal of Lifetime Capital Group in Redwood City, Calif., a wealth management firm. He says he had one client whom he pulled out of a premium financing arrangement several years ago. “That was in 2008. If I hadn’t gotten him out of it when the market tanked, he would not have had the premium renewed.”

This, Raybin says, is what is often not disclosed about insurance premium loan financing programs: If the market dives, the policyholder typically has to come up with more collateral. And as premiums are renewed annually, that can add up; the loan can be disqualified. “The cost and risk aren’t worth it,” he says.

Tom Handler, a well-known estate planning lawyer and chairman of the Advanced Planning & Family Office Practice Group at his firm Handler Thayer LLP in Chicago, agrees that there can be myriad problems with premium financing. He says most problems arise with prepackaged premium financing arrangements whereby hidden fees, charges and commissions are high, putting the structure at risk. Consequently, life insurance products with some minimum crediting rates are often preferred as a risk-mitigation element, he says.
Still, Handler does see value in custom-designed premium financing programs-the type offered by Cool Springs.

“In the current estate tax environment, with a $5 million lifetime exclusion amount likely to disappear soon, many families are considering strategies designed to leverage the exclusion into gifts of five to ten times this amount using life insurance and premium financing. When properly structured and implemented, these arrangements can materially reduce risk for a family, provide needed liquidity and serve compelling taxation, estate planning, premarital planning and asset protection goals,” Handler says.

The basic principle of a good program is to keep the loan principal amount close to the cash surrender value. This minimizes a lot of risk, according to Handler.

Another issue in the space is fraud. “There have been abuses,” Baitler admits. “Agents created needs that didn’t exist.”

Every one of the Cool Springs co-founders vehemently addresses the ethics issue and each says that’s what separates them from the pack. “We don’t do that. We are here to find people who need insurance and find an effective way to buy it,” says Baitler.

And buy it clients have-700 transactions to the tune of $7 billion since Watson entered the scene in 2000.

“The results have been off the charts,” boasts Simmons.

That may be the case. And Cool Springs may be emphasizing its “cool” factor. But it’s going to have to convince more people that its “boring” equity strategy works, too, over the life of the policy-in good markets and bad.

Simmons’ ‘soft’ side

Gene Simmons (in case you missed the accompanying profile) can come across as kinda heartless and unforgiving. He uses hard language for hard stuff and life’s hardships. He ain’t soft, and-despite his penchant for the spotlight-doesn’t like publicity about his do-good side. Even on his Web site (www.genesimmons.com) where you can read and learn more than you probably wanted to know about him, there is nothing mentioned about charity work.

But the glimmer of Simmons’ own upbringing and raw worldview comes through most apparently when he speaks about his philanthropy.

“We do a lot of work. But I won’t do the public announcement of, ‘Look at this big check I am giving,’ and I am embarrassed when celebrities do that: when they hold up a blowup of a big check. Basically, it’s self-aggrandizement. ‘Look how nice I am.’ So a lot of things happen in private because that is the way it should be. We have a few hundred kids in Africa that I support. Schools. We do all that. But there is no need to do a press conference for that. If one child’s life changes, that means that one child in Africa gets educated and can then educate others as it grows up. Forest fires often start with a spark.”

Among his other charitable pursuits are the Wounded Warrior Project, which provides programs and services to injured servicemen; Israel, where he was born; and pediatric AIDS, because “kids are innocent.”

But every cause that he donates to has a logic that fits in with Simmons’ philosopher-king mentality: Freedom is had in order to prosper. Get in the way of that and lose all rights. Even charity has its place in that. Simmons was an only child. An immigrant from Israel. A mother who was a Holocaust survivor. He is self-made. It doesn’t take a Ph.D. in psychology to figure out where and why Simmons would support the causes he does. It’s about fighting the bad by doing good, not doing good for good’s sake alone. I came to realize that it’s this type of chess match that plays out every day in Gene Simmons’ head; he seems scared to death about being left vulnerable. So he supports causes that in turn support strength and independence.

“I am committed to our military, our troops. Without them we are nothing. Politicians don’t give us freedom. The Constitution doesn’t give us any freedom. Policemen, the firemen, our military give us our freedom. Without them, it’s chaos. Look what’s happening in London. In London?

“The best thing we can do is force other Americans to stand up and realize that without our military and our policemen and our firemen-you know, the men and women in uniform-there would be chaos. Your house goes on fire. Without a fireman, what do you think is going to happen? We get attacked on 9/11. Without our military going out there and obliterating these assholes, what do you think is going to happen?”

Another cause close to Simmons’ heart-although he might hate it put that way-is pediatric AIDS.

“Kids are innocent. They didn’t do anything. The fact is that they [were] born and they are carrying the sins and mistakes and accidents of their mothers and fathers. The fact that a child can be born with AIDS is just unacceptable,” he opines.

For more information on the Wounded Warrior Project go to: www.woundedwarriorproject.org

For more information on pediatric AIDS go to: www.pedaids.org