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 [...]
The answer is an emphatic NO. Some permanent life insurance policies, specifically guaranteed universal life (GUL) and Whole Life (WL), have required premiums, though WL out of pocket premiums can be reduced by dividends, paid-up addition cash values or policy loans. But the premium paid is not the actual cost of the policy and finding the underlying costs on the policies is a challenge. For [...]
Twenty-one years ago, Charles Hunter Montgomery set up a life insurance trust naming his daughter, Kimberly, as trustee. He was guided on the purchase by his longtime advisors at a major wirehouse firm in his hometown, who also agreed “to administer the investment account to maintain that life insurance policy .” (1) The policy, a $2M survivorship life policy on Charles and his wife, was [...]
What steps should you take if a grantor says they want to surrender their policy? In the decade-plus that we have been managing life insurance for TOLI trustees, we have noticed that the weak link in their services usually is remediation. The inability to analyze policy options in changing situations is an area of future liability. Some trustees we have spoken with have surrendered policies [...]
Over the years, we at ITM TwentyFirst have been leaders in peer education. The TOLI Handbook, a free download available here as a PDF, provides industry peers with a single source guide for managing trust-owned life insurance (TOLI) trusts and policies. We have, over the years, provided hundreds of hours of professional CE for several professional designations. Our staff is encouraged and incentivized to seek [...]
Recently, the French government passed a law designed to provide the French economy with a more effective means of finance and to promote retirement savings, as well as employee stock ownership. The act - The Plan d'Action pour la Croissance et la Transformation des Entreprises (PACTE; Action Plan for Business Growth and Transformation) - “will facilitate access to diversified funding” and “provide companies with the [...]
The acting Superintendent of the New York State Department of Financial Services, reacting to almost "1,400" complaints from in-state consumers, recently issued an alert about universal life policies that provided insight for any trustee managing universal life policies. The alert focused on flexible premium universal life policies without secondary death benefit guarantees. As pointed out in the publication, universal life is meant to be a [...]
Over the years, the life settlement industry has had its ups and downs. During its heyday in 2007 and 2008, consumers sold $12 billion in life insurance death benefits to investors in the secondary market. But the economic downturn dried up investor money, and as late as 2015, just $1.7 billion in death benefits changed hands. (1) For many years, life insurance provided just two [...]
Earlier this year we started the TOLI Challenge with the question: What is most important when determining the liability of a trustee’s actions? Click here for that answer. Today, we have a follow up true or false question. Only permanent life insurance policies can be sold in the life settlement market, True or False? It may surprise you that the answer is false – some term [...]
Back in November, we wrote about the possible “squashing” of “investors’ hopes for unlimited returns using life insurance.” At that time, the government of the Canadian province of Saskatchewan altered the regulations for a specific universal life insurance policy that some investors had hoped would be their pot of gold. However, the regulation change did not affect a court case that has since settled in [...]
Universal life policies came into the market offering premium flexibility and transparency that was unknown in whole life policies. However, universal life policies lacked one thing those whole life policies had - death benefit guarantees. If you paid your premium on a whole life policy, the policy death benefit was guaranteed to be paid. The earliest universal life policies (current assumption) were fixed investment products [...]
When we first ventured into the trust-owned life insurance (TOLI) servicing business, our lead product was a policy tracking and trust administration system - what is known today as InsuranceIQ, and it was light years ahead of anything TOLI trustees had at their disposal. At the time, most trustees simply got an in-force ledger every couple of years, along with a rating update for the [...]
