An ILIT is an Irrevocable Life Insurance Trust, created primarily to own life insurance, and sometimes other assets. The trustee of an ILIT is the fiduciary of the trust assets. The trustee can be a family member (who is not the creator or ‘grantor’ of the trust), or an independent trustee at a bank, for example. Regardless of who is named trustee, the trustee has a fiduciary responsibility to manage assets for the benefit of trust beneficiaries.
While conducting a policy review, advisors may uncover an older policy that has accumulated considerable cash value from which a significant loan was taken. On many of the older policies, if the loan remains, it may cause the policy to lapse prematurely. Not only will the policy lapse, but in the event the loaned policy has a gain on it, there will be taxes due. In this scenario, there are 3 options:
The best laid plan requires a hedge. And this certainly applies to retirement planning.
Even if clients are saving enough for retirement, there remain 5 roadblocks to a well-intentioned retirement plan that need to be addressed:
Regular reviews of inforce life insurance policies are essential and can uncover important planning opportunities. While conducting a policy review, advisors may uncover an older policy that has a significant policy loan. If not addressed, these policies can become a tax time bomb. When it comes to policy loans there are 4 available options to weigh, all of which have their own set of benefits and considerations.
LTC in the News
The word is spreading. Major news outlets are letting the American people know the importance of long-term care planning. Are you? Here are a few recent third-party articles.
Like other financial assets, life insurance policies require ongoing management. A policy check-in helps ensure life insurance policies continue to address a client’s changing needs and that the policies are performing as expected. A policy review also serves as a touch-point in an advisor’s relationship with clients. Here are 10 reasons why a policy review is essential to the client-advisor relationship.