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

Updated 1/16/2020, originally posted 10/12/2018 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 [...]

2020-01-16T15:27:57-06:00January 16th, 2020|General Interest, Life Settlements|0 Comments

Choosing the Best Permanent Life Insurance Policy

Updated 1/7/2020, Originally posted 10/05/2018 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 [...]

2020-01-07T14:33:05-06:00January 7th, 2020|General Interest, Whole Life|1 Comment

The TOLI Handbook – Chapter 15: Understanding Life Expectancy Reports

Updated 11/20/19 Originally posted 8/15/19 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 [...]

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

Updated 11/13/19 Originally posted 8/8/18 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 [...]

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

Updated 11/6/19 Originally posted 8/1/18 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. As a country, we are aging and the population of the average TOLI portfolio is aging too. [...]

The Life Insurance Trust Company Solves Major Problems for Veteran Life Insurance Agents and Advisors

Updated 10/29/19 Originally posted 6/4/18 Four years ago, it was reported that the average age of a financial advisor in America was 51, with 43% over the age of 55 and many heading towards retirement (1). One year later, an industry publication noted that the average age of a US life insurance agent was even higher — 59 (2). Many veteran life insurance agents have [...]

Carrier Offers Life Policy Buyback – Another Trustee Decision Dilemma

Updated on 10/23/2019 Originally posted on 4/28/2018 Last year, 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 [...]

Genworth Life and Annuity Insurance Company to Raise Cost of Insurance on Gold Policies

This week our New York City office received letters alerting us of a cost of insurance (COI) increase for Genworth Life and Annuity Insurance Company “Genworth”. Over the last year, Genworth has only produced illustrations based on guaranteed rates and guaranteed cost of insurance rates for certain products, citing insurance regulations. This follows a similar pattern of other carriers including John Hancock Life Insurance [...]

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

Updated 10/8/19 Originally Posted 4/17/18 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 [...]

TOLI Trustees Can Learn From 401(k) Lawsuits

Originally Posted 3/26/18. Updated 10/2/2019 Those of us in the fiduciary world are aware of the rash of lawsuits targeting 401(k) plans. Fidelity, the largest retirement plan provider in the US, settled lawsuits filed by its own employees alleging that its plan choices were too costly (1). Vanguard, a firm known for its low costs, was referenced in a suit alleging that by selecting classes [...]

2019-10-02T13:20:17-05:00October 2nd, 2019|General Interest, TOLI Administration|2 Comments