TOLI Trustee Alert: Life Settlements – When Should You Sell a TOLI Policy?

It is estimated that over 100 billion dollars in life insurance benefits are surrendered each year by older aged citizens in the US. (1)  Unfortunately, the typical senior probably does not understand the life settlement market and the opportunity to maximize the value of an asset that many let lapse valueless after a lifetime of premium payments. Today’s TOLI trustee needs to be aware.  With [...]

2021-02-26T17:21:13-06:00February 26th, 2021|General Interest, Life Settlements|0 Comments

Choosing the Best Permanent Life Insurance Policy

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 [...]

2021-02-19T14:53:42-06:00February 19th, 2021|General Interest, Whole Life|1 Comment

The TOLI Handbook – Chapter 15: Understanding Life Expectancy Reports

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 [...]

Remediation, the Weak Link for Trustees – The TOLI Handbook: Chapter 16

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 [...]

TOLI Trustee Work Load and Liability Climbing as Use of ILITs Diminish

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 [...]

Carrier Offers Life Policy Buyback – Another Trustee Decision Dilemma

A couple of years ago, Lincoln National was offering some policy holders the opportunity to receive an “Enhanced Cash Surrender Value” if they surrendered their life insurance policies within a specific time frame.  A few weeks before this was widely known, we began to receive letters from the carrier, along with a Frequently Asked Questions (FAQ) brochure explaining the offer.The offer is not unlike offers [...]

COVID-19 Update: Summer Excess Mortality Higher than Expected

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 [...]

2020-12-14T09:21:50-06:00December 14th, 2020|Covid-19, Life Settlements|0 Comments

Shared Characteristics of Long-Term Care and Life Insurance Cost Increases

Sally Wylie, a retiree living on an island in Maine, was stunned when her long-term care (LTC) policy premium almost doubled. According to the Wall Street Journal article that recounted her dilemma, the one-time learning specialist took on part-time work to help with the finances, and she and her husband cut back on expenses to afford the premium for the policy that was purchased to [...]

All About Equity Index Universal Life (EIUL) – Part Three: Illustrating the Policy

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 [...]

All About Equity Index Universal Life (EIUL) – Part Two: Policy Mechanics

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 [...]

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