Trustee Alert: Don’t Be a Casualty of the Life Insurance Illustration War

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 [...]

TOLI Trustee Alert: Life Settlements – How to Sell a Policy

In our last blog, we tackled the question of when to sell a life insurance policy.  With past and potential future 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. The TOLI trustee must become aware of the sales process, so we wanted to provide a [...]

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

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 needs to be aware.  With [...]

2021-02-26T17:21:13-06:00February 26th, 2021|General Interest, Life Settlements|0 Comments

Choosing the Best Permanent Life Insurance Policy

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 universal life premium in a [...]

2021-02-19T14:53:42-06:00February 19th, 2021|General Interest, Whole Life|1 Comment

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

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 into a $3 million equity [...]

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

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 policy that was purchased to [...]

All About Equity Index Universal Life (EIUL) – Part Three: Illustrating the Policy

In the last two posts, we explained the popularity of the equity index universal life policy, as well as the mechanics of the policy. While the policy is tied to an equity index, it is a fixed product, with the bulk of the premium going into the carrier’s general account to satisfy the floor and the balance – a much smaller amount – going [...]

All About Equity Index Universal Life (EIUL) – Part Two: Policy Mechanics

In the first posting in this series on the equity index universal life (EIUL) policy, we talked about the popularity of the policy and the general characteristics of the policy. In this post, we will outline the mechanics of the policy. As we mentioned in the first post, the policy cash value is tied to an index, for example, the S&P 500. The gain [...]

All About Equity Index Universal Life (EIUL) – Part One: The EIUL Policy

A Three-Part Series for Trust-Owned Life Insurance (TOLI) Trustees As the back-office administrator of thousands of life insurance trusts for fiduciaries across the country, we deal with every type of policy. We have found the equity index universal life policy to be one of the most misunderstood policies in the TOLI space. This three-part series provides a thorough background in the policy, its mechanics, [...]

What You Need to Know About Life Expectancy Estimates

Life expectancy estimates are used by life insurance companies and other organizations in various ways. The Life Settlement market relies heavily on this type of data to ensure the health of their portfolios. Let’s take a look at how life expectancy estimates are created, and what they include. How Life Expectancy Estimates are Calculated Life Expectancy (LE) estimates take a number of factors into [...]

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