What is most important when determining the liability of a trustee’s actions? Over the years, we have noticed that the knowledge of TOLI trustees varies from trust company to trust company. After publishing the TOLI Handbook in 2018, we thought we would “chunk it down” in 2019 with the TOLI Challenge—a series of questions designed to test the knowledge of the typical TOLI trustee. We [...]
Life insurance premium financing is a specialized strategy that has gained favor in recent years for high net worth individuals looking to purchase large life insurance policies without tapping their personal or business cash flow. For these qualified wealthy individuals, the retained capital that would go to pay a premium can be better utilized for investment opportunities they believe will outperform the cost of the [...]
A little over five years ago we wrote about a little-known problem for trust-owned life insurance (TOLI) trustees - clients living to age 100 - the maturity age for many older life insurance policies. The problem is that many policies in their portfolio will not pay out a full death benefit at maturity and the chances of insureds living to maturity are increasing. According to [...]
Near the end of last year we posted a blog reporting the 2019 dividend payouts for the big four mutual companies, all whose primary product line is whole life insurance. Dividends are a return of premium when carrier results exceed a very conservative projection for investments, income, and expenses. Dividends are paid annually on participating whole life insurance and determined at the discretion of [...]
The first thing you notice after entering the Orlando World Center Marriott Resort and Convention Center is the lineup of vendor booths set up in the hallway – the overflow from the cavernous convention center hall. This year’s Heckerling Institute on Estate Planning appears to have been a great success. The number of attorneys attending was up, and those putting on the session attracted more [...]
A bill introduced in Congress could help spur sales of life insurance in the secondary market by allowing policyholders to use the proceeds from the sale of a life insurance policy to fund an account to be used for paying long-term care expenses on a tax-favored basis. HR Bill 7203, introduced by U.S. Rep. Kenny Marchant of Texas, a Republican, and U.S. Rep. Brian Higgins [...]
We have three office locations across the United States, and as I write this, none will see 40 degrees as their high-temperature today, so it is no wonder we are looking forward to heading south to the sunshine of Orlando, Florida, for this year's Heckerling Institute of Estate Planning session from January 14-18. However, it is much more than that. It has been about 15 [...]
First, we want to thank all ITM TwentyFirst clients for another remarkable year of growth. Without the support of our partners at banks, trust companies, family offices, and law firms across the country, we could not sustain the growth that has made us the largest manager of in-force life insurance in the country. So, thank you for that. One reason for our growth over the [...]
For the last few years, we have tracked the dividends paid by four large mutual carriers whose main product offering is whole life. These carriers are owned by their policyholders, not stockholders and operate with a long-term business view. Unlike most life insurance carriers, they sell their products through a career agency system – a dying breed. Their dividend rate and payments are a [...]
As a TOLI trustee, you have a fiduciary responsibility to ensure that every transaction - either a new policy sale or replacement is not only suitable for your client, but also in your client’s best interest.
A recent online survey about life insurance found that 33% of life insurance policy owners do not understand how their policy works. (1) I suspect that this number is probably low. Maybe the other 67% probably think they know how it does, but I imagine they could get a refresher lesson on how it actually does. Even if they do understand how it works, do [...]
In 2013, we wrote about the sale of Lincoln Benefit Life, an Allstate company, to Resolution Life Holdings, Inc. It was the first purchase in the States for the UK company, run by British entrepreneur, Clive Chowdry, whose ambition, according to the Financial Times, was to “buy up and roll together a number of life assurance businesses and to run them for cash instead of [...]
In the 1980s when current assumption universal life (CAUL) hit the market, sales illustrations were created showing cash value returns of 10% and more every year – for a product that was invested in fixed instruments. When equity markets soared and variable universal life (VUL) became the rage, many sales illustrations projected 12% returns – again, every year. Life insurance illustrations are at best a [...]
On October 30th, Voya Financial, a company we wrote about because of a lawsuit filed against it for cost of insurance increases that occurred on universal life policies sold in the past under the Security Life of Denver banner, announced in its third-quarter earnings call it would be ceasing all life insurance sales as of the end of the year. The company, which was spun [...]
Back in the spring, we reported on the Lincoln National “Enhanced Cash Surrender Value” offer the carrier began making to a select group of policyholders. These unsolicited offers would allow policyholders to receive an amount higher than the current cash surrender value to return their policies to the carrier. As we noted, the offers were similar to some made on mispriced variable annuities after the [...]
