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, [...]
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 [...]
As we move into the second half of 2019, there are three continuing trends with respect to TOLI management in the corporate fiduciary space. If you find yourself managing or overseeing TOLI at a bank or trust company, I’m sure you are seeing some of this play out in your own department. TREND #1 Overdependence on Support Software If used correctly, ILIT support software [...]
Variable universal life (VUL) policies, whose sales took a nosedive after the 2007-09 market crash, have had a resurgence. Last year (2018) sales jumped, with annualized premiums from new VUL sales increasing by 14% over the prior year. (1) VUL policies provide the policy owner with the opportunity to invest in the equity market. The cash value in the policy is held in separate accounts [...]
According to information gathered on life insurance sales, two distinct trends are clear. Overall, life insurance sales are mostly flat – up less than 0.5%. (1) However, sales are up with two product lines: variable universal life and equity index universal life. In 2018, sales of VUL policies were up 9%, while sales of EIUL policies set a record. (2). Total universal life insurance sales [...]
We at ITM TwentyFirst have always been very proactive about continuing education. Just like many other industries, the unique and hard to value asset industry is always changing and filled with complexity. Our team members, and the company as a whole, participate in several continuing education efforts every year. This July, we will be taking part in a week-long course focused on administering Hard to [...]
The most common fear for a life insurance trustee is that somehow the ball is dropped and the policy in their care lapses. After all, a trust-owned life insurance (TOLI) trustee, even if they are not sophisticated in all the nuances of life insurance policy management, should at least be able to keep the policy in force. But unintended lapses do happen, and when they [...]
In October of last year, we reported on a settlement in the case against Transamerica for a cost of insurance (COI) increase, which raised the carrying costs on a group of universal life policies by 200% or more. In one example, we reported the cost to maturity on one policy in our portfolio jumped from $36,400 to $81,595, after the policy got hit with a [...]
