| 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. |
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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.
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