Take the TOLI Challenge: In a Permanent Life Insurance Policy, the Cost of the Policy is Equal to the Premium – Yes or No?

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 [...]

Equity Index Universal Life Illustration Projections to (Thankfully) Get Another Look by Regulators

We have written as recently as November of last year about the issues trust-owned life insurance (TOLI) trustees encounter when dealing with policy illustration projections. If you are a fiduciary managing a policy, a sales or an in-force life insurance ledger may be one of the only tools you have to predict the outcome of a policy under your care. However, life insurance illustrations are [...]

2019-03-20T15:29:24-05:00March 5th, 2019|Equity Index Universal Life, News|0 Comments

The TOLI Handbook – Chapter 10: Understanding Equity Index Universal Life

Equity index universal life (EIUL) is the hottest product in the permanent life insurance marketplace. The “star of the life insurance show” according to one published report (1) that is touted as providing the upside of the equities market without the risk of loss. The carriers accomplish this by crediting the EIUL policy with the positive returns of an index (often the S&P 500 – [...]

A Decade of TOLI: The Changes and Challenges

In our last Blog post, we recapped the year in Trust Owned Life Insurance (TOLI) for 2015 (see: The Year in TOLI – 2015 Edition). As one of the pioneers of life insurance policy management in the United States, ITM TwentyFirst has the unique ability to participate in and track trends in the TOLI industry. Almost a decade ago, we surveyed our TOLI portfolio. In 2015, [...]

The Year in TOLI – 2015 Edition

One of the highlights for us here at ITM TwentyFirst was the June 1 merger of Insurance IQ, Insurance Trust Monitor (ITM), and TwentyFirst (See Merger of Leading Life Insurance Service Firms) to create ITM TwentyFirst. Synergy is a term thrown around easily when firms join forces, but in this case, it is true. The three firms have blended seamlessly to create the nation’s pre-eminent life insurance [...]

Actuarial Guideline XLIX Will Mandate More Realistic Assumptions for Index-Based Life Insurance Policies

We have written, as recently as June of this year, in Life Insurance Illustration Assumptions…a Trustee’s Dilemma, about the investment assumptions used in life insurance sales illustrations. In most illustrations, all else equal, the higher the return assumed in the investment backing the cash value, the lower the premium shown to carry the policy. Historically, this has led to aggressive sales presentations that illustrate well, but ultimately [...]

Life Insurance Illustration Assumptions…a Trustee’s Dilemma

In the early ‘80s when interest rates skyrocketed (Are you old enough to remember 18% mortgage rates?) the insurance industry created Universal Life insurance (UL), with sales illustrations based on “current assumptions,” which included the fixed rate being credited to the policy’s cash value at the time of the policy’s issue. As with all sales illustrations, the historically high “current” assumptions were projected over the [...]

2014 – A TOLI Update for Trustees

As we end 2014 I wanted to post some observations from the past year. The TOLI business is not growing, at least not significantly. We are still feeling the estate tax filing threshold jump to an indexed $5M. As the number of prospects drops, so does the number of new clients. Yes, there are reasons other than estate taxes to hold a policy in a [...]

New York State Regulators Eying Indexed Universal Life Sales Practices – What Every Trustee Should Learn From This

In a past blog entry entitled, What You (as Trustee) Need to Know About Equity Indexed Universal Life, I wrote about this popular life insurance product, Indexed Universal Life.  One of the problems I spoke about was the sales practices of the agents (and carriers) providing the product. In the blog entry, I mentioned that some carriers and agents assume crediting rates in the policy that [...]

2014-09-29T13:17:43-05:00September 29th, 2014|Equity Index Universal Life, TOLI Administration|2 Comments

Illustrating Equity Index Universal Life Policies

In my last entry, What You (as Trustee) Need to Know About Equity Indexed Universal Life, I spoke about one of today’s hot insurance products. The EIUL policy is designed to capture a portion of the upside of the equity market, while limiting the downside.  The policy is credited with returns from an index without dividends, with both a cap on the upside and a guaranteed [...]

What You (as Trustee) Need to Know About Equity Indexed Universal Life

Lately, ITM has seen an upsurge in the use of Equity Indexed Universal Life (EIUL) policies. Agents are touting the product’s “upside potential” with sales illustrations projecting higher rates of return than Current Assumption Universal Life (CAUL) products. These agents also highlight the “downside protection” that makes the product attractive to those fleeing the volatility of Variable Universal Life (VUL) policies.  Once again, the insurance industry [...]