Take the TOLI Challenge: Only Permanent Life Insurance Policies Can Be Sold, True or False?

Previously, 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 [...]

Join ITM TwentyFirst for a Week-Long Education Course on Unique and Hard to Value Assets

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 summer, we will be taking part in a week-long course focused on administering Hard [...]

Ever Heard of a Life Insurance Carrier Giving $200,000+ in Premium Back? No? Now You Have

In the almost 15 years we have been managing life insurance policies, we have never encountered a situation where a life insurance carrier volunteered to give back money.  Oh, sure, you can surrender a policy and get money back, or take a loan or withdrawal on your policy to get some cash, but at a cost. Recently we received a letter from a carrier [...]

How Whole Life Dividends Are Calculated

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 fluctuate. Over the last twenty [...]

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 [...]

The TOLI Handbook – Chapter 15: Understanding Life Expectancy Reports

We recently wrote about remediation and the challenges that TOLI trustees have when managing a policy.  Remediation is not just developing the best options for an under performing policy, increasingly it means maximizing the value of a policy that a grantor believes is no longer needed, or one whose expected funding has stopped. These decisions must be well-thought-out and every data point that can be [...]

TOLI Trustee Work Load and Liability Climbing as Use of ILITs Diminish

As the federal estate tax laws changed, the use of new irrevocable life insurance trusts (ILITs) diminished, but the work required to administer existing ILITs went up along with the potential liability attached to the asset class.  There are several reasons for this. 1. As a country, we are aging and the population of the average TOLI portfolio is aging too. For example, 25% of [...]

3 Trends in Corporate ILIT Administration That You Should Be Aware Of

There are three continuing trends with respect to TOLI management in the corporate fiduciary space.  If you find yourself managing or overseeing TOLI at a bank or trust company, I’m sure you are seeing some of this play out in your own department. TREND #1 Overdependence on Support Software If used correctly, ILIT support software is great for minimizing potential administrative miscues.  Many of [...]

Prudently Managing ILITs – It Is More Than Just Tracking a Policy

Updated 5/14/2020, Originally posted 3/12/2019 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 [...]

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