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| Today’s
life insurance policies are sophisticated financial instruments. Gone are
the days when a policy is purchased and “put in a drawer” until
a claim is filed. The major forms of life insurance held in trust are single
and joint life versions of Whole Life, Universal Life, and Variable Universal
Life. These policies need to be periodically reviewed not only for the solvency
of the underlying carrier, but for the policy’s sufficiency to meet
Grantor objectives. The sales illustration is almost always used at the time of purchase to establish an expected premium and payment schedule. This illustration assumes the constancy of such variables as investment return and Cost of Insurance rates, projecting those constants 30 – 50 years into the future. Yet, in fact, insurance companies have the right – within very broad ranges – to re-price in-force policies to conform to their long-term experience and profit margin requirements. Especially with the high premium-to-death benefit ratio often found in Trust Owned Life Insurance, the practice of “managing” to an in-force illustration from the insurance company simply perpetuates an expectation that is not likely to be met. The consequence is for policies to unexpectedly lapse or require a substantial increase in premium to maintain coverage. Ethical Edge Insurance Solutions, LLC has developed sophisticated models of industry pricing parameters – revised annually – to aid in developing standards and benchmarks that are much more likely to provide a realistic view of the future. Further, EEIS applies Modern Portfolio Theory and Probability Analysis to suggest probabilities for given outcomes – with the ability to re-model and balance death benefit with premium flow to better assure a favorable outcome on behalf of the Grantor. The resulting reports generated by EEIS are an essential part of the Trustee’s ongoing due diligence. We invite you to use
this site to meet our principals, understand our philosophy, and see the
benefits of our technology. |