Posts Tagged: life insurance

?There is a simple, little-known technique that can enable you to use your life insurance losses to save thousands of dollars in taxes.?

To Read the Full Article, Click Here. ?

a href=”https://algibbons.com/files/2012/10/life-insurance-picture.jpg”>? “Life Insurance – It is better to have it and not need it than to need it and not have it!

We are starting to see bulletins from several companies regarding price increases in no-lapse guarantee products due to new, higher reserve requirements.? Prices are going up, most likely effective 1/1/13.?

The Highlighted comments below show examples regarding re-pricing due, also, to low interest rates.? As you know, no-lapse guarantee products are very often trust-owned policies used for estate planning purposes for high net worth clients.? As Steve Leimberg and I correctly predicted in our January, 2010 article companies are withdrawing, compromising, or raising prices on no-lapse guarantee products.

If you have clients who are considering the purchase of new, trust-owned life insurance, they might be wise to do that sooner rather than later.

Penn Mutual ? Survivorship IUL (no longer accept formal applications for the Extended No-Lapse Guarantee (ENLG) Rider on the Survivorship Plus IUL product.? All pending applications of Survivorship Plus IUL that include the ENLG Rider, for which we make an underwriting offer, must be issued by December 7, 2012 and paid for by December 31, 2012 in order to receive the ENLG Rider)

Principal ? SUL Protector II (new; replaces SUL Protector; reprice consisting of price increase , with the most affecting being single and short pays; no single premium caps; illustration will haveguaranteed values only)

American General ? AG Secure Lifetime GUL (reprice; increased rates especially for limited-pay and single-pay cases;? will build cash value earlier than the original version of the product)

American General ? AG Secure Survivor GUL (single premium payments of $250,000 or more will no longer be accepted; this includes single payments of any type including one pay for the life of the policy, external or internal 1035 exchanges or dump-ins at any time during the first policy year)

Penn Mutual ? Accumulation Builder Choice IUL (new IUL; automatically includes a 30-year no-lapse guarantee for those ages 55 and younger, a to age 85 guarantee for ages 56-79 and a 5 ?year guarantee for ages 80-85.? choice of 3 indexed and 2 fixed accounts; 12-month DCA; 1% floor; guaranteed 100% participation rate; indexed loan option with a fixed loan rate; offers a Chronic Illness ADBR)

Aviva ? Guarantee UL Solution III, Advantage Builder IV w/NLG Rider and Survivorship Builder w/NLG rider (NLG rate premium increase; premium increase will range from 10% for most cases to upwards of 25% on single premium cases)

Nationwide ? YourLife IUL (guaranteed participation rate increased to 100% from 60%)

Prudential ? UL Protector (reprice; full pays will remain essentially unchanged on average; single-pay scenarios will increase approximately 13% on average; no change to comp or features)

Prudential ? SUL Protector (reprice; full pays will increase approximately 3% on average; single-pay scenarios will increase approximately 13% on average; no change to comp or feature)

Pacific Life ? Flexible Duration, Medium Duration, and Lifetime No-Lapse Guarantees Riders (reprice consisting of price increases; affects the Versa-Flex NLG, Pacific Prime UL-NLG, Pacific Prime IUL, Pacific Indexed Accumulator 4, Pacific Indexed Performer LT and Indexed Pacific Estate Preserver; reprice will have no effect on inforce policies or any products? short-term no-lapse guarantees)

VERY IMPORTANT:

Issues in Personal Life Insurance Planning

As a follow up to Part 1, this Bulletin highlights and provides suggestions for dealing with common income tax issues that arise in personal life insurance transactions, including: (1) policy loans, (2) the use of modified endowment contracts (?MECs?), and (3) the transfer for value rule. Recognizing the issues and understanding the applicable rules can minimize unexpected tax consequences and avoid problems, like phantom taxable income.

VERY IMPORTANT:?

Issues in Personal Life Insurance Planning

Life insurance planning has become more complicated as the products become more complex, the tax laws remain uncertain, and the marketplace grows more advanced. This complexity requires a much higher level of sophistication in planning and can lead to hazards and unexpected tax consequences for the inexperienced.

The proper purchase, transfer, funding, and on-going management of a life insurance policy requires the collaboration of an expert team of advisors (producers, lawyers, financial planners, accountants, etc.) and a clear process for implementation and post-closing administration.