Bill Boersma: On Life Insurance

Recently I was brought a situation by a family office through their attorney.  The family wants to transfer/sell two $10,000,000 survivor life policies to another trust for planning purposes.  The policy owner went to the two insurance carriers to ask for the 712 values or Interpolated Terminal Reserve (ITR).  Though the two policies w

ere the same death benefit on the same couple issued at the same time for the same kind of policy, the numbers came back very, very different from the two insurance carriers, each of which is one of the top rated and recognized carriers in the market.

The cash value of each policy was roughly $1,500,000 and one carrier came back with a number exactly the same as the cash value and even stated on their communication “Please note that ABC Life uses the Net Cash Value as a proxy for the ITR.”  However, the other carrier came back with a $3,000,000 number. For full post, click here…

Though the following piece I wrote on term insurance with Professor Gregg Dimkoff may seem very basic, sometimes it’s the basics that bear reviewing so we don’t miss something while focusing on the “high end” stuff.  In numerous recent situations clients have suffered significant harm because the basics weren’t a focus.  Also, the market is changing and we can’t take for granted our old assumptions are still accurate.  Enjoy.