Because we have managed life insurance for over a decade our clients will sometimes inquire about the best permanent life insurance policy to buy. Our answer – always – is there is no single best policy. The market usually has a “latest and greatest” policy and today it is equity index universal life (EIUL) which captured 64 percent of all universal life premium in a [...]
We recently wrote about remediation and the challenges that TOLI trustees have when managing a policy. Remediation is not just developing the best options for an under performing policy, increasingly it means maximizing the value of a policy that a grantor believes is no longer needed, or one whose expected funding has stopped. These decisions must be well-thought-out and every data point that can be [...]
A TOLI trustee we work with received a request from a grantor tired of gifting to pay premiums on his portfolio of whole life policies. His agent suggested that the three policies be replaced with one policy with a reduced death benefit. The existing portfolio totaled $5.7 million of coverage. The agent proposed transferring the $2.1 million of cash value into a $3 million equity [...]
As the federal estate tax laws changed, the use of new irrevocable life insurance trusts (ILITs) diminished, but the work required to administer existing ILITs went up along with the potential liability attached to the asset class. There are several reasons for this. 1. As a country, we are aging and the population of the average TOLI portfolio is aging too. For example, 25% of [...]
Executive Summary: Historically, mortality rates trend downward during the summer months, but in the summer of 2020 mortality was on the rise for life settlements. In total from April through September, we observed at-most a very small protection from COVID-19 on the life settlements population. COVID vaccines will likely reduce excess mortality in life settlements significantly by Spring 2021. Insureds in nursing homes and [...]
In the last two posts, we explained the popularity of the equity index universal life policy, as well as the mechanics of the policy. While the policy is tied to an equity index, it is a fixed product, with the bulk of the premium going into the carrier’s general account to satisfy the floor and the balance – a much smaller amount – going [...]
In the first posting in this series on the equity index universal life (EIUL) policy, we talked about the popularity of the policy and the general characteristics of the policy. In this post, we will outline the mechanics of the policy. As we mentioned in the first post, the policy cash value is tied to an index, for example, the S&P 500. The gain [...]
A Three-Part Series for Trust-Owned Life Insurance (TOLI) Trustees As the back-office administrator of thousands of life insurance trusts for fiduciaries across the country, we deal with every type of policy. We have found the equity index universal life policy to be one of the most misunderstood policies in the TOLI space. This three-part series provides a thorough background in the policy, its mechanics, [...]
In August of 2017, we notified you of the pending COI increase from Phoenix Life (A Nassau Re Co.) regarding the Phoenix Accumulator Universal Life and Phoenix Estate Legacy products. While litigation and a class action settlement restricted Nassau from COI increases until after 12/31/2020, the original message indicated that “there will be an overall increase to cost of insurance rates, as well as [...]
Life expectancy estimates are used by life insurance companies and other organizations in various ways. The Life Settlement market relies heavily on this type of data to ensure the health of their portfolios. Let’s take a look at how life expectancy estimates are created, and what they include. How Life Expectancy Estimates are Calculated Life Expectancy (LE) estimates take a number of factors into [...]
