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Life Insurance Perspectives

This newsletter is for attorneys, CPAs, insurance agents and financial advisors to better understand the complexities of life insurance.

If you would like to receive electronic notifications when new newsletters are posted, please send your name and email address to kkatt@peterkatt.com.

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Volume 17, Number 8 - August 2015
Premium flexibility.

 

Volume 17, Number 7 - July 2015
Coordinating disability insurance.

 

Volume 17, Number 6 - June 2015
The importance of policy anniversary dates when terminating or replacing some policies.

 

Volume 17, Number 5 - May 2015
Retirement income or legacy support.

 

Volume 17, Number 4 - April 2015
Sub-stardard policy offers.

 

Volume 17, Number 3 - March 2015
Dealing with irrational clients.

 

Volume 17, Number 2 - February 2015
Can certain life insurance agents obtain better underwriting than their competitors?

 

Volume 17, Number 1 - January 2015
It is becoming increasingly difficult to obtain policy information from life insurance companies.

 

Volume 16, Number 12 - December 2014
Insurance companies protect their agents, not their policyowners.

 

Volume 16, Number 11 - November 2014
Another something-for-nothing scheme that doesn't work.

 

Volume 16, Number 10 - October 2014
Incomprehensible practices.

 

Volume 16, Number 9 - September 2014
How captive insurance companies (CICs) resemble past tax avoidance schemes like VEBAs, 419s, 412(i)s, etc.

 

Volume 16, Number 8 - August 2014
Three considerations when policy replacement is considered.

 

Volume 16, Number 7 - July 2014
Permanent life insurance policies issued before around 2008 had maturity ages of 95 to 100. Your older clients with life insurance need to know what the matuity age is, and what impications apply to reaching this age.

 

Volume 16, Number 6 - June 2014
Misunderstanding VULs can produce adverse consequences. VUL's are very different from whole life and ULs when buying them for family protection or associated with estate planning.

 

Volume 16, Number 5 - May 2014
Current assumption life insurance policy purchases and their management.

 

Volume 16, Number 4 - April 2014
Making reasonable and safe choices for using cash values for supplemental retirement income. Also, an update on last month's Perspectives on paying guaranteed UL premiums too early.

 

Volume 16, Number 3 - March 2014
Potential problems with paying the premiums for universal life guarantee policies too early.

 

Volume 16, Number 2 - February 2014
Using real life anecdotes on life insurance policy cash values to pursue a better practical understanding.

 

Volume 15, Number 12 - December 2013
Financial advertising, three pedestrian but important points.

 

Volume 15, Number 11 - November 2013
Be careful where you get your advice.

 

Volume 15, Number 10 - October 2013
Maximizing tax advantages without leaving an inheritance.

 

Volume 15, Number 9 - September 2013
Insurance companies that won't cooperate in the management of their products.

 

Volume 15, Number 8 - August 2013
Index universal life insurance.

 

Volume 15, Number 7 - July 2013
Update on long term care insurance.

 

Volume 15, Number 6 - June 2013
Fixed-income rates and immediate annuities.

 

Volume 15, Number 5 - May 2013
An analysis for the purchase of additional life insurance. ULG vs. whole life.

 

Volume 15, Number 4 - April 2013
Taking into account relevant factors about policy designs always benefits clients.

 

Volume 15, Number 3 - March 2013
Seasoned money in profit sharing plans.

 

Volume 15, Number 2 - February 2013
Correlating ULGs to medium and high grade bonds based on the companies' financial strength ratings.

 

Volume 15, Number 1 - January 2013
Assessing interpolated terminal reserve (ITR) values for guaranteed universal life policies.

 

Volume 14, Number 12 - December 2012
Participating whole life policies with large loans.

 

Volume 14, Number 11 - November 2012
Not all premium strategies are equal. The type of policy needs to be taken into account.

 

Volume 14, Number 10 - October 2012
Assessing health issues with policy management.

 

Volume 14, Number 9 - September 2012
Comparing universal life with whole life.

 

Volume 14, Number 8 - August 2012
Can agents in exclusive networks get better deals?

 

Volume 14, Number 7 - July 2012
Life Insurance as an Investment - Say It Ain't So.

 

Volume 14, Number 6 - June 2012
Retirement income options. "I always flinch at financial products that seem too-good-to-be-true."

 

Volume 14, Number 5 - May 2012
Permanent life insurance should be treated as the financial asset that is it. Don't overlook policy reviews.

 

Volume 14, Number 4 - April 2012
The frustrations of dealing with insurance companies' home offices.

 

Volume 14, Number 3 - March 2012
Retirement options for large company pension benefits.

 

Volume 14, Number 2 - February 2012
The life insurance industry generally doesn't see any significant risk with these very aggressively priced guaranteed policies, there are a few of us that do.

 

Volume 14, Number 1 - January 2012
Examine options for level death benefit policy design.

 

Volume 13, Number 12 - December 2011
Analyzing the potential risks of a sweet deal.

 

Volume 13, Number 11 - November 2011
Premium financing revisited.

 

Volume 13, Number 10 - October 2011
Premium financing doesn't work.

 

Volume 13, Number 9 - September 2011
An analysis of Schwab v. Commissioner.

 

Volume 13, Number 8 - August 2011
Having the expertise to discern hidden shadow accounts.

 

Volume 13, Number 7 - July 2011
The need for regular reviews to track policy pricing and its competitiveness.

 

Volume 13, Number 6 - June 2011
Advisors, attorneys and trustees can make rational choices, but need to reduce vulnerabilites.

 

Volume 13, Number 5 - May 2011
The practicalities of liquidity life insurance amounts.

 

Volume 13, Number 4 - April 2011
Five don'ts and a do for can't-miss-life-insurance-riches.

 

Volume 13, Number 3 - March 2011
The valuation of policies, primarily for gifting or sale to ILITs and distribution from pension plans.

 

Volume 13, Number 2 - February 2011
The unintended consequences of TEFRA.

 

Volume 13, Number 1 - January 2011
The story behind reverse mortgages.

 

Volume 12, Number 12 - December 2010
Relations between professionals and clients.

 

Volume 12, Number 11 - November 2010
Determining your client's health status.

 

Volume 12, Number 10 - October 2010
Implications of when and how a permanent life insurance policy matures.

 

Volume 12, Number 9 - September 2010
Business Continuation Planning: Part II.

 

Volume 12, Number 8 - August 2010
Business Continuation Planning: Part I.

 

Volume 12, Number 7 - July 2010
The hidden opportunities of neglected policies.

 

Volume 12, Number 6 - June 2010
Premium financing and life settlements.

 

Volume 12, Number 5 - May 2010
Comparing charitable and commercial income annuities.

 

Volume 12, Number 4 - April 2010
A shocking Wall Street Journal article highlights the potential for intrigue surrounding investor initiated life insurance.

 

Volume 12, Number 3 - March 2010
Awarness of whole life policy loans.

 

Volume 12, Number 2 - February 2010
Replacement analysis of an existing VUL policy.

 

Volume 12, Number 1 - January 2010
Two excellent options for liquidity life insurance.

 

Volume 11, Number 12 - December 2009
Save your senior clients from life insurance fiascos.

 

Volume 11, Number 11 - Nobember 2009
The consequences of becoming involved in tax avoidance schemes.

 

Volume 11, Number 10 - October 2009
A proper analysis of retaining or selling life insurance.

 

Volume 11, Number 9 - September 2009
Important life insurance issues reviewed and updated.

 

Volume 11, Number 8 - August 2009
Managing loans and withdrawals from cash value policies.

 

Volume 11, Number 7 - July 2009
Managing universal life policies is primarily the responsibility of the policyholder.

 

Volume 11, Number 6 - June 2009
One size fits all is not professional estate life insurance planning. Professional planning should make the not so subtle distinctions of what types of assets are involved, and what people planning issues can be handled.

 

Volume 11, Number 5 - May 2009
With all replacements there may not be right or wrong decisions, but an objective analysis is needed so clients can make more informed choices compatible with what they perceive to be in their best interests.

 

Volume 11, Number 4 - April 2009
The need for ILIT policy management.

 

Volume 11, Number 3 - March 2009
Beware of Wile E. Coyote (i.e., life settlements.)

 

Volume 11, Number 2 - February 2009
Even astute businessmen can be putty in the hands of a manipulative agent because life insurance is so damed complicated.

 

Volume 11, Number 1 - January 2009
Dealing with staggering economic benefit costs associated with split dollar.

 

Volume 10, Number 11 - December 2008
How just plunging ahead with policy terminations due to tough economic times is probably a costly approach.

 

Volume 10, Number 10 - November 2008
Policy reviews and management. Not only are they still a good idea, but a necessity.

 

Volume 10, Number 9 - October 2008
Life insurance in a distressed economy.

 

Volume 10, Number 8 - September 2008
How the bailout of AIG may affect American General Life.

 

Volume 10, Number 7 - August 2008
Equity index universal life policies and a return to the illustration wars of the 1980s and early 1990s.

 

Volume 10, Number 6 - July 2008
Bearer of bad news - every so often we must deal with the emotions of delivering bad news while continuing to focus on an objective evaluation.

 

Volume 10, Number 5 - June 2008
An annuity-rescue strategy with an emphasis on paying close attention to the details.

 

Volume 10, Number 4 - May 2008
Hidden values in life insurance could unknowingly lead to huge losses.

 

Volume 10, Number 3 - April 2008
Legal opinion letters on questionable policy valuations.

 

Volume 10, Number 2 - March 2008
The inherent advantages of paying gift taxes.

 

Volume 10, Number 1 - January 2008
With astute management of VUL policies clients can have equity participation in their life insurance portfolio.

 

Volume 9, Number 10 - December 2007
Issues involved with using a variable annuity for retirement income.

 

Volume 9, Number 9 - November 2007
Three reasons to take a another look at permanent life insurance over term alternatives.

 

Volume 9, Number 8 - October 2007
Risks the financial strength rating services can, and cannot, detect.

 

Volume 9, Number 7 - August 2007
Creative analysis and approaches to term insurance that may add value for your clients.

 

Volume 9, Number 6 - July 2007
An astute analysis is necessary when contemplating policy replacement.

 

Volume 9, Number 5 - June 2007
How the secondary market for life insurance has evolved into - not for the better.

 

Volume 9, Number 4 - April 2007
A look at income annuities for baby boomers entering retirement.

 

Volume 9, Number 3 - March 2007
Commentary on index ULs, and a rejoinder to Steve Leimberg's March 14, 2007 newsletter.

 

Volume 9, Number 2 - February 2007
A rejoinder to Steve Leimberg's recent newsletter on premium financing, and rebuttals to letters critical of my November 2006 Journal of Financial Planning column on annuities.

 

Volume 9, Number 1 - January 2007
The ramifications of Internal Revenue Code Section 402(a). Safe harbor value vs. fair market value.

 

Volume 8, Number 7 - December 2006
Huge sums to be saved through policy management.

 

Volume 8, Number 6 - October 2006
412(i) Plans Continue to be a problem for clients.

 

Volume 8, Number 5 - August 2006
Maintaining professional curiosity.

 

Volume 8, Number 4 - June 2006
An analysis of the various types of annuities.

 

Volume 8, Number 3 - March 2006
Investor initiated life insurance posing as charitable donations.

 

Volume 8, Number 2 - February 2006
Commentary on Missed Fortune 101: A Starter Kit to Becoming a Millionaire, by Douglas R. Andrew.

 

Volume 8, Number 1 - January 2006
Again the life settlement issue races onto our radar screen, but this time in a form posing a danger to estate planning practitioners.

 

Volume 7, Number 6 - November 2005
The intersection of premium financing and life settlements, an update on death futures

 

Volume 7, Number 5 - October 2005
Clients should be alerted to the possibility of potential tax consequences of so-called return of premium term insurance

 

Volume 7, Number 4 - September 2005
Providing clients with access to knowledegable input regarding the income tax advantages of life insurance

 

Volume 7, Number 3 - July 2005
Understanding life insurance policy math, including target premiums and their relation to commissions, can produce big savings

 

Volume 7, Number 1 - January 2005
Using stochastic testing to evaluate the effect of fluctuating investment yields on variable life policies

 

Volume 6, Number 8 - December 2004
Personal Equity Plans (PEPs) - a tax avoidance scheme

 

Volume 6, Number 7 - November 2004
Marketing life insurance as death-futures, an ethical abomination

 

Volume 6, Number 6 - October 2004
Hidden surrender charges - the profound potential for loss when policies are terminated

 

Volume 6, Number 5 - August 2004
The importance of analysis before backdating life insurance policies

 

Volume 6, Number 4 - June 2004
An analysis of financing permanent life insurance premiums via third party lenders

 

Volume 6, Number 3 - April 2004
No Lapse Premium Guarantee Policies - an Update
The real issue in assessing the relative risks of buying very aggressively priced NLPGs is whether adult supervision will arrive on the scene in time to push them back from the brink

 

Volume 6, Number 2 - February 2004
Universal life funding requirements - Potential large savings
The cost of neglecting regular expert reviews of permanent life insurance

 

Volume 6, Number 1 - January 2004
Defined benefit pension plans are making a comeback via 412(i) plans

 

Volume 5, Number 8 - November 2003
Insured buy-sell agreements for 100% owners
Entity buy-sell agreements

 

Volume 5, Number 7 - September 2003
The impact of volatility on variable life losses

 

Volume 5, Number 6 - July 2003
Financial strength ratings
Anticipating what you ask for

 

Volume 5, Number 5 - June 2003
"Free" agent services
Trust fiduciary's allegiances

 

Volume 5, Number 4 - May 2003
No-lapse-premium-guarantees

 

Volume 5, Number 3 - April 2003
Large surrender charges

 

Volume 5, Number 2 - March 2003
412(i) plans have become a favorite "wrapper" for tax-avoidance schemes
Legal opinion letters

 

Volume 5, Number 1 - February 2003
Permanent life insurance in tax-avoidance scams
Considering low-load survivorship universal life as an alternative to cheap term

 

Volume 4, Number 3 - August 2002
Life settlement issues
Monitoring smoker ratings for childrens' policies in dynasty trusts

 

Volume 4, Number 2 - April 2002
Understanding the macro planning foundation of your clients' life insurance
Paying premiums out-of-pocket versus via policy dividends

 

Volume 4, Number 1 - February 2002
Tax-avoidance and permanent life insurance
Springing cash values
Diversification

 

Volume 3, Number 4 - December 2001
Variable life insurance and collapsing stock portfolios
Defined-Benefit policy designs
Low interest rates

 

Volume 3, Number 3 - September 2001
Viaticals
How insurance companies treat their old policies
Long term care insurance

 

Volume 3, Number 2 - July 2001
Secondary guarantees
Taxable income on dividends being accumulated at interest
Disability insurance

 

Volume 3, Number 1 - April 2001
Policy loans and phantom taxable income
Life insurance companies make policy management mistakes
Viaticals

 

Volume 2, Number 3 - August 2000
Policy replacement and surrender policy values v. asset share
Premium management and the health of the insured
Comparing variable life insurance with conventional investing

 

Volume 2, Number 2 - April 2000
Vanishing premiums
Monitoring permanent life insurance policies
The proposed repeal of estate taxes

 

Volume 2, Number 1 - January 2000
CPAs earning commissions
Lapse-supported pricing
Health history of potential insureds

 

Volume 1, Number 3 - September 1999
Exaggerated projected policy performance and future premiums
Second-to-die policies with changing values at the first death
The adverse tax consequences of certain insured/owner/beneficiary relationships
Variable life insurance and fluctuating investment yields

 

Volume 1, Number 2 - May 1999
Illustrations showing exaggerated projected policy values
Policies subject to proposed class settlement
Policies purchased prior to non-smoker discounts
Deferred annuities

 

Volume 1, Number 1 - February 1999
Poorly priced universal life policies
Handling companies that have been seized by regulators
How to handle outstanding policy loans
Long term care insurance

 


Katt & Company • 890 Treasure Island Drive • Mattawan, MI 49071
Phone: 269.372.3497 • Fax: 269.372.4681
Email: pkatt@peterkatt.com