Millions of businesses worldwide have drafted or purchased business continuity plans, some have even practiced or simulated implementation of said plans, but few ever dreamed a worldwide pandemic would force these plans into action. The rapid spread of the Covid-19 virus has impacted all of humanity, including thousands of businesses which include fiduciary services. For those who serve as a fiduciary or provide fiduciary support [...]
Updated 3/12/2020, Originally posted 2/5/19 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 [...]
Updated 3/5/2020, Originally posted 1/2019 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 board of directors. They are paid in addition to the guaranteed cash values in the policy, but the dividends themselves are not guaranteed and will [...]
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.
Updated 2/19/2020 Originally posted 12/11/2018 An 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. Perhaps the other 67% think they know how it works, but I imagine they could get a refresher lesson. Even if a policy owner does understand how it works, do [...]
At ITM TwentyFirst, it is our goal to keep our clients informed of industry wide news that may affect how life insurance assets are managed. This week we became aware of cost of insurance (COI) rate increases for blocks of policies for Minnesota Life Insurance Company. The increases will affect all policies that have the word “adjustable” in the product name including Variable Adjustable [...]
Updated 2/5/2020, Originally posted 11/29/18 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 [...]
Updated 1/29/2020, originally posted 10/26/18 In our last two blogs, we discussed when and how to sell a life insurance policy. In this blog entry, we want to talk about the taxation of a life insurance policy sale for the seller. The death benefit of a life insurance held in trust is received free of both estate and income taxes, however, if a TOLI [...]
Updated 1/22/2020 Originally posted 10/19/2018 In our last blog, we tackled the question of when to sell a life insurance policy. With the changes in the estate tax laws and the aging of the population in the typical TOLI portfolio, life settlements will become more prominent in the coming years, and the TOLI trustee must become aware of the sales process, so we wanted to [...]
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 [...]
