American International Group Inc. (AIG) sold most of its U.S. life-insurance premium finance assets Tuesday to First Insurance Funding Corp. for $679.5 million.

First Insurance Funding, a unit of Wintrust Financial Corp. (WTFC), said the acquisition makes it the largest traditional life-insurance premium finance lender in North America. Life-insurance premium financing is used mostly by high net-worth customers who want to buy big insurance policies for estate-planning purposes and spread out the premium payments. The FIFC's most popular loan requires a minimum net worth of $5 million.

If certain conditions of the deal are met, the FIFC also will buy more life-insurance premium finance assets for $61.2 million.

The units were part of AIG's financial-services segment, which also holds its derivatives trading business, AIGFP; International Lease Finance Corp., its aircraft-leasing business, and a consumer-finance business.

Wintrust, a holding company based in Lake Forest, Ill., with $11 billion in assets, also controls nine Illinois-chartered banks, one Wisconsin-chartered bank and five nationally chartered banks, and operates wealth manager Wayne Hummer Wealth Management.

The AIG units in the deal, A.I. Credit Corp. and A.I. Credit Consumer Discount Co., offered life-insurance premium financing for AIG and other insurers' policyholders.

An AIG representative didn't immediately return a phone call to say how the proceeds of the sale will be used.

AIG is seeking to raise money to repay tens of billions of dollars to taxpayers after the U.S. government rescued it in September from potential bankruptcy.

Proceeds from two of its biggest asset sales to date, however, have been used to bolster capital at its insurance businesses.

Its property/casualty and general insurance business, Chartis, until recently called AIU Holdings, held $32.1 billion in statutory surplus at the end of the first quarter.

When AIG closed on its sale of auto insurer 21st Century Insurance Group for $1.9 billion earlier this month, Edward Liddy, AIG's chairman and chief executive, said the money raised "further improves AIU Holdings' quality of capital by monetizing its interest in 21st Century Insurance Group."

AIG said the same of the $1.136 billion it raised in an offering of 29.9 million shares it held in re-insurer TransAtlantic Holdings Inc. (TRH).

AIG's biggest payment to the government consists of a deal to sign over equity in its international life businesses, AIA and Alico, in return for reducing its outstanding loan of about $46.9 billion by $25 billion, leaving AIG still in debt by about $21.9 billion to the Fed.

AIG received a $40 billion investment from the U.S. Treasury's Troubled Asset Relief Program, and the Treasury also provided an equity capital commitment facility of up to $29.835 billion. AIG participates in the New York Fed's commercial paper funding facility.

AIG shares were up 57 cents at $13.57 in recent trading, while Wintrust's were up $1.19 at $18.57.

-By Lavonne Kuykendall and Kerry Grace Benn, Dow Jones Newswires; 312-750-4141; lavonne.kuykendall@dowjones.com