Expenses are a fact of life for any business. Like most organizations, ife insurance companies need to pay salaries,rent, commissions and other operating costs.

Generally you can lump the carriers expenses into two general classes:  Ongoing operating expenses and the cost of new business acquisition.

Whole life insurance and Term life insurance policy premiums have their projected costs worked out in the initial pricing of the policy when it is issued, but flexible premium policies like Universal Life Insurance Policies remain sensitive to cost issues for the life of the policy.

The insurer’s ongoing expenses can be dealt with in a number of ways in universal life insurance policies:

Each year, the carrier will apply a percentage of its operating expenses against in force policies.   Ongoing expense charges may be deducted from each premium payment when the owner makes her premium payment.

Alternatively , a charge for ongoing expenses may be made monthly from the policy’s cash value, or can be split amongst the existing cash value and the incoming premium.

When ongoing expense charges are deducted from each premium, the policy spec page usually notes the anticipated deduction.  Most policies have an expense charge of 4 to 7 percent.

If your carrier is deducting the costs from your cash value instead, then your specifications page will note that the carrier is deducting a percentage of cash value.  Generally the costs will be 3-5 cents per $1000 in specified coverage.

The carrier might even specify a fixed monthly policy fee.

The more competitive policy will, of course, tend to have lower expense charges.

Beyond the carriers monthly expense fees, it will also need to recover the costs of finding you as a client and selling you the policy.
A typical carrier might spend your first two years in premiums on the costs of getting your policy “on the books.”  The agent generally makes 90 to 105 percnet of the first year premium as his commission when he sells the policy.  His Broker/General Agency might make another 45% to cover their costs of managing the policy placement process.
The carrier also needs to pay for medical records, and underwriters, and analysts, etc.

Excess first-year expenses will be recovered by the carrier over the life of the policy. They may be recovered from each premium received by the company, or will be deducted from the cash value in the form of a surrender charge if the policy is terminated before the costs are fully recovered.  A universal life insurance policy’s surrender period may be as short as 10 years or as long as 20 years following the policy issue date.

In general, the carrier is almost always in the red on any policy they sell until the policy has been in force for at least three years,  so they structure their charges to discourage consumers from bailing out of a policy until its costs have been recovered and the transaction has been profitable.

Taxation of Life Insurance Benefits

Single Lump Sum Payment

When the death benefit of a  life insurance policy are paid out in a single distribution to the named beneficiaries of the policy in a single payment, they are generally not considered income, and are exempt from state and federal income taxes.   Under the federal taxcode, the entire death benefit is generally considered part of the insured’s estate and could be subject to estate taxation if the insured owned the policy at the time of death, or if the proceeds were payable the  estate itself as the beneficiary of the policy.  Therefore there are significant tax ramifications inherent in both the designation of the owner at policy inception, and in the definition of the beneficiaries of the policy.

Installment Settlement Approach

If the beneficiaries choose settlement options where the death benefit is paid along with interest (such as life income, fixed period, fixed amount, or joint and survivor options), then the tax status of each payment will reflect its composition.   The portion of each payment representing the  death benefit is generally tax-free, but the interest is taxable as income. The carrier will calculate an exclusion ratio to determine the tax-free distribution of death benefits and the portion that is taxable interest.

A portion of each payment is considered death benefits until an amount equal to the original death benefit is recovered tax-free.  The percentage of payment considered death benefit in each distribution is calculated based on the beneficiary’s  life expectancy and other terms of the distribution contract.

Banner Life
Address1 1701 Research Blvd
Rockville, MD 20850
800.638.8428
301.279.4800
WebPage http://www.LGAmerica.com/

Financial Ratings:

A.M. Best Financial Strength A+
Standard & Poor’s Financial Strength A+

Products and Underwriting

Banner Life – Life Value Term 20 & 30

Type Renewable and convertible term life insurance policies that provide a level death benefit to age 95. Premiums increase annually and are guaranteed for the initial 20 or 30 years. Thereafter, premiums increase annually and are guaranteed to never be greater than the maximums stated in the policy.

Conversion Options Convertible for the duration of the 20-year period for Life Value Term 20 and 30-year period for Life Value Term 30, or up to attained age 70, whichever comes first. Policies issued to insureds age 66 or over are convertible for 5 years.

Issue Ages Age nearest birthday
Life Value Term 20: 20-70
Life Value Term 30: 20-60

Face Amounts
Min/Max Band 1: $250,000-$999,999
Band 2: $1,000,000 & over
Modal Factors Semi-annual = .51 Quarterly = .26 Monthly = .0875
Policy Fee $65

Tobacco Definition Preferred Plus Non-Tobacco: no use of tobacco or nicotine-based products in the past 36 months
Preferred Non-Tobacco: no use of tobacco or nicotine-based products in the last 24 months
Standard Plus Non-Tobacco: no use of tobacco or nicotine-based products in the last 12 months
Standard Non-Tobacco: no use of tobacco or nicotine-based products in the last 12 months

Special Underwriting
Features Preferred Plus Non-Tobacco:
Impairments: No personal history of disease or impairment that would affect mortality
Blood Pressure: Currently well controlled with or without treatment, with no readings in the past two years greater than 136/86

Family History: No cardiovascular disease or cancer in either parent or siblings before age 60

Driving History: No more than 2 moving violations in last 3 years. No DWI, DUI, reckless driving, license revocation or suspension in last 5 years.

Cancer History: Only available on certain types of skin cancer

Cholesterol: May not exceed 220 with or without treatment; CHOL/HDL Ratio may not exceed 5.0 with or without treatment

Substance/Alcohol abuse: No abuse

Aviation: Available only with exclusion rider

Avocation: Available only if no flat extra premium would be required

Residency/ Citizenship: Must be U.S. resident for past 3 years and either a U.S. citizen or have permanent Visa or Green Card

Preferred Non-Tobacco/Tobacco :
Impairments: No personal history of disease or impairment that would affect mortality

Blood Pressure: Currently well controlled with or without treatment, with no readings in the past two years greater than 146/90

Family History: No cardiovascular or cancer death in either parent before age 60

Driving History: No more than 2 moving violations in last 3 years. No DWI, DUI, reckless driving, license revocation or suspension in last 5 years.

Cancer History: Only available on certain types of skin cancer

Cholesterol: May not exceed 250 with or without treatment; CHOL/HDL Ratio may not exceed 6.0 with or without treatment

Substance/Alcohol abuse: No abuse in the past 10 years

Aviation: Available only with exclusion rider

Avocation: Available, however may have flat extra

Residency/ Citizenship: Must be U.S. resident for past 3 years and either U.S. citizen or have permanent Visa or Green Card

Standard Plus Non-Tobacco :
Impairments: Can have personal history of certain impairments or diseases

Blood Pressure: Currently well controlled with or without treatment, with no readings in the past two years greater than 152/92

Family History: No cardiovascular or cancer death of more than one parent before age 60

Driving History: No more than 3 moving violations in last 3 years. No DWI, DUI, reckless driving, license revocation or suspension in last 3 years.

Cancer History: Available depending on type and date of onset of cancer

Cholesterol: May not exceed 280 with or without treatment; CHOL/HDL Ratio may not exceed 7.0 with or without treatment

Substance/Alcohol abuse: No abuse in the past 7 years

Aviation: Available, however may have flat extra or exclusion rider

Avocation: Available, however may have flat extra

Residency/ Citizenship: Must be U.S. resident for past 2 years and either U.S. citizen or have permanent Visa or Green Card

Standard Non-tobacco/Tobacco:
Impairments:Can have personal history of certain diseases or impairments

Blood Pressure: Currently well controlled with or without treatment, with no readings in the past two years greater than 156/94

Family History: No cardiovascular death of more than one parent before age 60

Driving History: No more than 4 moving violations in last 3 years. No DWI, DUI, reckless driving, license revocation or suspension in last 2 years.

Cancer History: Available depending on type and date of onset of cancer

Cholesterol: May not exceed 300 with or without treatment; CHOL/HDL Ratio may not exceed 8.0 with or without treatment

Substance/Alcohol abuse: No abuse in the past 7 years

Aviation: Available, however may have flat extra or exclusion rider

Avocation: Available, however may have flat extra

Residency/ Citizenship: Must be U.S. resident for past 2 years and either U.S. citizen or have permanent Visa or Green Card

When people come to the end of the end of their days, they need to wrap up their affairs in this world, and prepare themselves for the next. Proper estate planning, and ElderCare/HealthCare Planning can help them leave an orderly financial legacy for their families when they move on. All transitions are difficult, and none is more difficult to face than the passing of a generation. It is only natural that many people avoid any type of planning. In middle age the prospects of death are remote and unreal, and greater challenges take precedence. In early retirement years, families often don’t want to face the idea of eventual mortality. In later years, as health fails, the prospect of passing becomes all too real, and way too frightening to face. With the decay of physical, and often mental, health it becomes difficult to plan a rational and economical transfer of family wealth and assets to the next generation.

Ongoing health care costs can wipe out a lifetime of savings quickly. Often leaving a a couple to pass on to their children and grandchildren. Medicare, Medicaid and other government funded programs available to those aged 65 and above can be useful for conserving family assets, but only if the family has structured its assets to qualify. Long term care coverage provides tools to manage the healthcare costs of a long, ongoing deterioration of physical and mental health.

It is never too soon for families to discuss their wishes and dreams for their later years, and their goals for passing on both their accumulated wisdom and assets. It is also critical to plan early to ensure the possibility of those plans coming to pass.

If the conversation never takes place, and planning is ignored, then the issues of age will be handled in a haphazard, crisis management approach. The parents hard earned assets can slip away, neither able to provide for the parents nor pass on to the children. Those assets that remain, can waste away in probate, and squabbles amongst children. Precious heirlooms won’t get handed on to the heirs that will most appreciate them, and often animosity and strife looms over the loss and mourning of a parent’s death.

Age, declining health, and eventually death are transitions that all families must make, but having in place proper planning can help see a family through the transition with pain for the loss but without the agony of strife.

• Continuous Premium Life Insurance A standard form of Whole Life Insurance.  Premiums are paid for the life of the insured or to age 100, at which time the policy endows and the death benefit is paid.
• Limited Pay Whole Life  The full premium of the policy is paid out in a fixed number of payments over a fixed period, such as ten or 20 years. At the end of the selected period, the policy is paid up and no further premiums are due.
• Single Premium Life Insurance Single premium, as the name implies, is a life insurance policy in which a single premium payment at policy inception pays for the policy for the life of the  insured. No further premiums are ever due, and the policy is guaranteed to last the lifetime of the insured.
• Combination Policies or Blended Life   These policies are a blend of term and permanent insurance coverage.  These policies offer a lower premium than regular permanent life, but can last the entire lifetime of the insured.
• Indeterminate Premium Life Insurance  Normally sold by stock insurance companies. They have a lower premium guaranteed for the first three to five years, and then the premium is adjusted for the remainder of the policy’s life.
• Adjustable Life Insurance  Adjustable life combines term and whole life. The premium, death benefit, and length of term may all be adjusted by the policyowner.
• Joint Life (First-to-Die)  First to Die policies insure  two people with one policy. The policy matures and benefits are paid when the first person dies. The premiums are lower than if two policies were bought.
• Joint and Survivor (Second-to-Die)  Second to Die policies insure two people with one policy and pays benefits when the second person dies.  Less expensive than a single policy, especially when one of the insureds has health issues.  Second to Die policies are very effective estate transfer funding tools.
• Juvenile Policies  These policies are issued in $1,000 increments.. Starting at age 21, the death benefit jumps five times. Although coverage goes up, premiums are not increased, and no proof of insurability is required. The juvenile becomes owner of the policy at age 21.
• Family Protection Policies  The family income policy, or rider, provides an income to be paid upon the death of the primary wage earner. The payout period, which is set when the policy is written, is set to match the years the wage earner was expected to support the family.   Often used to guarantee an income until the youngest children are grown and out of the house.
• Endowment Policies  Endowment policies are often used when a certain sum of money is needed at a certain age.   The policy is overfunded so that it has a cash value equal to the death benefit at a specified age (rather than at age 100).  Benefits are paid at the endowment date, and the policy is cancelled.
• Modified Endowment Contracts  In 1988, the Technical and Miscellaneous Revenue Act (TAMRA), defined a new type of insurance contract the modified endowment contract (MEC).  Because it looks more like an investment vehicle than a life insurance policy,  withdrawals from this type of policy were singled out for special tax treatment.  A standard permanent life insurance policy can be accidentally turned into a MEC if the owner over funds the policy early in its life.   Talk to a qualified agent to make sure that your funding approach to your policy doesn’t eliminate its tax advantages.  Policies that are funded more rapidly than the 7-pay life policy are those in which large premiums were paid in during the early years of the policy. Because a single premium policy is obviously funded more rapidly than a 7-pay life policy, it is considered a modified endowment contract (MEC) .Withdrawals from a MEC are taken first from interest (earnings) and are taxed as ordinary income. Only after all the earnings are taken out can the owner’s cost basis be recovered tax-free.   Under a standard policy,  distributions are taken first from premium overpayments and are non taxable.

West Coast Life is part of Protective Life Insurance.

PO Box 830570, Birmingham, AL, 35283
Phone Number 800-366-9378
Fax Number 415-433-1372
WebPage http://www.westcoastlife.com

Financial Ratings:

WestCoast has excellent ratings for financial strength.

• A.M. Best rates West Coast Life Insurance Strength A+
• Moody’s rates West Coast Life Insurance A2
• Standard & Poor’s rates WestCoast Life AA-
• Fitch rates West Coast Life A

West Coast Life Insurance Products:

West Coast Life Insurance Company has three primary term insurance policies: As with most carriers, some products are not available in all states.

The Income Replacement Term Series is designed to pay out its death benefit as a guaranteed series of payments over time. For a policy designed to replace a stream of income, it provides a stream of income as the replacement.

The Focus Guaranteed Level Term Series is a renewable and convertible Term Life Insurance Policy with initial level premiums guaranteed for either 10, 15, 20, 25 or 30 years. Conversion must take place during the first 20 years of the products original term, and before the insured reaches age 75.

Riders:
Accelerated Death Benefit
Accidental Death Benefit
Waiver of Premium
Children’s Insurance: Children’s Insurance maximum is $20,000

Rider availability may vary by state. Actual terms and conditions contained in the rider govern all benefits provided. The ADB rider is automatically included where available. Other riders are optional and available at additional cost.

Tobacco Rules:

In order to qualify for non-tobacco use rates, the proposed insured must not have used tobacco or nicotine products in any form (gum, patches, etc.) within one year prior to the policy date that the application was written. For Super Preferred, however, the time frame is five years. All current positive cotinine (nicotine) results will be treated as tobacco usage.
Changes to nicotine policies will be considered after 2 years if the insured was a user at inception of the policy. If the insured had already quit prior to the time that the application was written, we will consider a reduction after one year. In both cases the change form GW-7175 request must be submitted with an exam, urinalysis and an APS at no expense to West Coast Life. If there has been a material change to the insured’s medical history, we may decline to remove the nicotine rating.

Cigar Use
We have increased the cigar allowance to up to 12 cigars per year for non-tobacco rates for all classes except Super Preferred. HOS must still be negative.
For Super Preferred risk classification, we allow 6 cigars per year. HOS must still be negative.

Underwriting Guidelines – Preferred
Proposed Insureds Through Age 70
Nicotine: No nicotine use of any kind for the last 1 year (urine negative
Driving: Not available with three or more moving violations in the last three years or if any DUI or reckless driving in the last five years.
Family History: No death from cancer, heart disease, or any cardiac related condition, of either natural parent or sibling prior to age 60. Waived if the applicant is actual age 60 or older unless both natural parents died from one of the same preceding impairments prior to age 60.
Basic Insurability: Standard risk medically and no ratable occupational hazard. No other adverse underwriting considerations per underwriting judgment to include cancer, heart disease, stroke, diabetes or alcohol/substance abuse.
Blood Pressure: Current readings do not exceed 140/90 through age 60 or 150/90 above age 60. Treated blood pressure must have been controlled for one year with favorable APS readings throughout the year.
Cholesterol: Total Cholesterol not greater than 250, including treated cholesterol and Cholesterol/HDL ratio is 6.0 or less.
Hazardous Sports: No hazardous sports or avocations, such as hang gliding, ballooning, motorized racing, parachuting or SCUBA diving within the last three years. Recreational SCUBA diving up to depths of 75 feet is acceptable.
Aviation: Not a private pilot or participant in aviation activities. Pilot and crew members on regularly scheduled passenger flights on major airlines are acceptable if not engaged in any other flying activities. Exclusions may be available.
Residence: US or Canadian Citizen or proof of permanent residence.

Read more about the West Coast Life FocusGuaranteed Level Term Policy here

Read more about the West Coast Life Insurance Income Replacement Term Policy here

1 800 800 9882

www.avivausa.com

Ratings:
A.M. Best Financial Strength A
Standard & Poor’s Financial Strength AA-
Moody’s Financial Strength A1
Fitch Financial Strength A+

Products:
Aviva Life and Annuity Company – 10 Year Term, 20 Year Term, 30 Year Term, ART

Type:
10 year, 20 year, 30 year, and ART term with guaranteed level premium rates for 10, 20 and 30 yrs respectively. Afterward, premium increases annually through age 95 with guaranteed maximums. ART product guaranteed rates for 10 years.
Death Benefit: Level amount payable through age 95, provided the policy is in force when the insured dies.
Premiums: Payable to age 95. Guaranteed level rates for 10, 20, and 30 years respectively. Afterward, premium increases annually through age 95 with guaranteed maximums. Actual rates could be lower. ART product guaranteed rates for 10 years.

Conversion Options:
Can be converted while the term policy is inforce to any permanent plan of insurance offered by the company without evidence of insurability, in the level term period (10 yrs for ART) or to age 75 if earlier

Issue Ages:
Ages Issued, Nearest Birthday
Term 10: 18-75 (18-70 Tobacco Classes)
Term 20: 18-65 (18-60 Tobacco Classes)
Term 30: 18-55 (18-50 Tobacco Classes)
ART: 18-75 (18-70 Tobacco Classes)
Available issue ages may vary by state.

Face Amounts:
Min/Max 10 Year: $100,000-$1,000,000+
20, 30 Year:
$50,000 minimum for Non-Tobacco and Tobacco
$100,000 all other classes
ART: $500,000

Underwriting:

Tobacco Definition
Premier Non-Tobacco: None in past 60 Months
Preferred Non-Tobacco: None in past 36 months
Std Plus Non-Tobacco: None in past 12 months
Preferred Tobacco: Available
Special Underwriting
Features
Non-Tobacco excludes all tobacco or nicotine use. Premier Non-Tobacco:
Cholesterol: 220;No Treatment. Cholesterol Ratio: 5

Blood Pressure: Age 18-60: 135/85; Age 61 up: 145/90; No Treatment

Build: See Build Chart

Family History (Parents & Siblings): No death of parent or sibling before age 65 from Coronary Artery Disease or familial cancer

Personal History: No coronary artery disease, diabetes, cancer, cerebrovascular disease. Must be classified as a standard mortality risk without application of coronary risk profile.

Alcohol/Substance Abuse: No history

Aviation: Available if qualifies as a standard aviation risk or with an exclusion or flat extra rating

Avocation: Available if qualifies as a standard avocation risk or flat extra rating.

Driving:No DUIs or reckless driving in the past 5 years. No more than 2 moving violations in the past 3 years.

US Residency: US resident for past 2 yrs

Citizenship: US citizen or have a permanent visa or green card

Travel (unsafe): Individual consideration

Military: No

Preferred Non-Tobacco:
Cholesterol: 240; Cholesterol/ HDL is 5.5; Treatment allowed;

Blood Pressure: Age 18-60: 140/90; Age 61 up: 150/90; Treatment allowed.

Build: See Build Chart

Family History (Parents & Siblings): No death of parent or sibling before age 65 from Coronary Artery Disease or familial Cancer

Personal History: No history of coronary disease, diabetes or cancer, cerebrovascular disease. Must be classified as a standard mortality risk without application of coronary risk profile

Alcohol/Substance Abuse: No history

Aviation: Available if qualifies as a standard aviation risk or with an exclusion or flat extra rating rating

Avocation: Available if qualifies as a standard avocation risk or flat extra rating

Driving: No DUIs or reckless driving in the past 5 years. No more than 2 moving violations in the past 3 years.

US Residency: US resident for past 2 yrs

Citizenship: US citizen or have a permanent visa or green card

Travel (unsafe): Individual consideration

Military: Individual consideration

Standard Plus Non-Tobacco:
Cholesterol: 270 (300 if HDL is 5 or less) Treatment allowed; HDL Ratio: 6.5

Blood Pressure: Age 18-45: 140/90; Age 46-60: 145/90; Age 61 up: 150/90; Treatment allowed

Build: See Build Chart

Family History (Parents & Siblings): Up to one death of parent or sibling before 60 from Coronary Artery Disease or familial Cancer.

Personal History: No coronary artery disease, diabetes, or cancer, except certain types of skin cancer.

Alcohol/Substance Abuse: No history

Aviation: Available if qualifies as a standard aviation risk or with an exclusion or flat extra rating

Avocation: Available if qualifies as a standard avocation risk or flat extra rating.

Driving:No DUIs or reckless driving in the past 5 years. No more than 2 moving violations in the past 3 years.

US Residency: US resident for past 2 yrs

Citizenship: US citizen or have a permanent visa or green card

Travel (unsafe): Individual consideration

Military: Individual Consideration

Preferred Tobacco:
Cholesterol: 250; With treatment; HDL Ratio: 6.5

Blood Pressure: Age 18-55: 140/90; Age 56 up: 150/90; With treatment

Build: See Build Chart

Family History (Parents & Siblings): No death of parent or sibling before age 60 from Coronary Artery Disease or familial Cancer.

Personal History: No history of Coronary Artery Disease, Diabetes or Cancer, except certain types of skin cancer.

Alcohol/Substance Abuse: No history

Aviation: Available if qualifies as a standard aviation risk or with an exclusion or flat extra rating

Avocation: Available if qualifies as a standard avocation risk or flat extra rating

Driving: No DUIs or reckless driving in the past 5 years. No more than 2 moving violations in the past 3 years.

US Residency: US resident for past 2 yrs

Citizenship: US citizen or have a permanent visa or green card

Travel (unsafe): Individual consideration

Military: Individual consideration

“Life insurance is a complex product,” noted Jack Dolan, of the American Council of Life Insurance. “An agent can be very helpful in advising you. An agent can help you find the policy that meets your needs today and in the future.”

Insurance agents know which kinds of life insurance are right for a young family just starting out, which work as a savings vehicle, which could be useful in retirement planning or estate planning. “Life insurance has lots of functions. An agent can lay that all out for you,” Dolan said.

In other words, an agent can save you lots of time you’d spend researching the issue on your own. He can serve as your guide now, and help you map your insurance needs in years to come as your situation changes. He can help you find a policy you can afford, and he can prevent you from making mistakes that could be very painful for your beneficiaries after your death, such as not having the right kind or amount of insurance.

How do you select an agent to work with? You can start by asking friends, relatives and neighbors if they would recommend their life insurance agent. Most people are happy to recommend a professional whose service they have been pleased with. Compile a list of three or four agents that you’d be interested in working with, based on personal recommendations.

You can also utilize LifeInsurance.net’s Agent Locator to find an agent near you. Just enter your three-digit area code to view a listing of local agents, including address, phone, e-mail, and a complete profile of each agency. Next, talk to each agent on your list. Ask what products they specialize in, who their typical client is, what insurers they represent, how long they have been in business, what services they offer, and any other concerns you might have. While you’re getting information about their practice, get a feel for how you would get along with each person in a professional relationship. After all, you’re buying life insurance for the long haul, and you will have to share intimate details about your life, finances and plans with your insurance agent. (And a good agent will ask you about those issues before trying to sell you any policy.) Pick someone you are comfortable dealing with and someone who can translate insurance-speak into language you understand.

All insurance agents are licensed by the states they do business in, and an agent should be willing to provide information about that license. Check with regulators to make sure the agent has the proper licenses and has not been disciplined. You can call your state insurance commission or access the department’s Web page by clicking on your state on this link through the National Association of Insurance Commissioners: (http://www.naic.org/consumer/state/usamap.htm ).

Agents who sell variable life insurance products must also be registered with the National Association of Securities Dealers. You can check with the NASD (http://www.nasdr.com/2000.htm) for information about the firm’s registration.

Remember, a good agent not only sells insurance; he helps guide his clients through the sometimes complex maze of choices associated with term, whole life, universal life, variable life and other life insurance options. And once he makes the sale, he will continue to service the client, including performing periodic “insurance checkups” to make sure the policy he sold you a few years ago still meets your needs.

Two of the primary uses of life insurance are income replacement in the event of the death of a family wage earner, and family wealth transfer upon the death of an older generation. While a term life insurance policy is an excellent tool for disaster management in the face of the death of working parent, it is generally a terrible tool for preserving a family’s wealth and transferring it to the next generations.

The next time you leave home and drive to the market, take a look around at the wealth that surrounds you. Every home that you see, a every small shop, restaurant, gas station, office building or parking lot represents a slice of some family’s wealth. For most families a fundamental goal of their family’s financial planning is preserving those assets and passing them down to the younger generations. Unfortunately, transferring an real asset like real estate or a business generally creates an immediate need for significant liquidity (that means cash to you and me.) When a business owner or property owner dies, the immediate cash requirements can include direct costs like estate taxes, legal fees and accounting and business valuation costs. Even more significant can be the need for adequate cash in the estate to allow division amongst several children without forcing the sale of the property or business to find the needed cash. If one child wishes to live in the family home, or run the family business, they often need to mortgage the asset or borrow heavily to generate enough cash to fund an inheritance for their siblings. When it isn’t possible to borrow enough, the other siblings will often force a liquidation/sale to generate the cash needed for a fair distribution.

Usually that cash need is far greater than what the business or real estate can generate out of operating cash flow. Often, a family patriarch and matriarch build wealth to leave to their children, and rather than a blessing they end up bestowing hostility and frustration.

In many cases, the most effective tool to provide liquidity in an estate to pay taxes and costs and to allow for distribution is a permanent life insurance policy. Since the estate transfer doesn’t happen until both spouses of the older generation pass, one potential tool to use for estate planning liquidity is a
Last to Die” insurance policy. Last to Die insurance is sometimes called second to die, or more formally, Survivorship life. A Last to Die Life Insurance Policy, is a joint life insurance policy that pays a death benefit only when the second insured dies.

Because current federal estate tax law allows an unlimited marital deduction between spouses, an estate can pass from the first to die to his or her spouse with no federal estate tax liability. When the surviving spouse dies, however, estate taxes are generally due, the property transfers generations and without proper planning the bottom falls out on everybody.
.
Because the insurance company does not pay a death benefit under the policy until the second death, the cost for a survivorship policy should always be less than the cost of one policy of the same face amount on either of the two individuals. A survivorship life insurance policy, or Last to Die policy is especially effective for estate planning if one of the spouses is either difficult or impossible to insure.

The two most common types of survivorship life insurance are whole life and universal life. Some companies also use a blend of whole life and term insurance. However, the higher percentage of term that is “blended” into the policy, the more sensitive the total policy is to slight changes in dividends or interest rates.

Survivorship life insurance covers two lives, usually, a husband and wife. The policy pays out upon the second death. Because of the unlimited marital deduction instituted by congress in 1981, individuals with estates large enough to incur an estate tax liability often structure their holdings in such a way that they delay the payment of any estate taxes until the second spouse’s death.

A second-to-die contracts allow the insurance company to delay the payment of the death benefit until after the second death as well. By aligning the payment of the death benefit with the imposition of the estate tax and the associated cash needs of the intergenerational asset transfer the survivorship life policy eases the transition, and helps the family preserve the assets that their elders worked so hard to build.

1-800-525-2799

www.accessallstate.com

Ratings:
A.M. Best Financial Strength A+
Standard & Poor’s Financial Strength AA-
Moody’s Financial Strength A1
Fitch Financial Strength A

Products:
Lincoln Benefit Life – TrueTerm Product Features

Type:
Term insurance to age 95
Premium rates guaranteed for 10, 15, 20, or 30 years
Conversion Options:
Each plan is convertible to the earlier of 10 years or the anniversary following age 60. A conversion credit is offered for conversions during the first 10 years, except for conversions in the first policy year. The conversion credit is equal to the total first-year premium associated with the base term coverage only. Partial conversions will be allowed, with a pro rata conversion credit based on the reduction in base coverage premium.
Issue Ages:
10-year: 18-80
15-year: 18-75 (18-70 for Male Smoker and Preferred Smoker; 18-73 for Male Standard No Tobacco <$200,000; 18-73 for Female Smoker and Preferred Smoker <$200,000)
20-year: 18-65 (18-63 for Male Smoker <$500,000)
30-year: 18-50 (18-47 for Male Smoker and Preferred Smoker <$500,000)
Washington issue ages:
10-Year = Ages 24-70
15-Year = Ages 22-65
20-Year = Ages 20-60
30-Year = Ages 18-50 (18-44 for Male PS and SM, 18-49 for Female PS and SM)

New York issue ages:
10-Year : 18-65
15-Year : 18-65
20-Year : 18- 60
30-Year : 18-50

Face Amounts:
Minimum Face Amount: $50,000
$100,000 (WA Only)
Rate Bands
Band I: $50,000 – $99,999
Band II: $100,000 – $199,999
Band III: $200,000 – $499,999
Band IV: $500,000 – $999,999
Band V: $1,000,000 – $4,999,999
Band VI: $5,000,000 and above

Tobacco Definition:
Preferred Elite: No use within 5 years
Preferred: No use within 3 years
Standard Select: No use within 2 years
Standard No Tobacco: No use within 1 year
Preferred Smoker: Maximum of 1 pack per day.
Standard Smoker: Any tobacco use not qualifying for Preferred Smoker

Special Underwriting:
Features Preferred Elite > $5,000,000 (base only)
Blood Pressure – Without RX: 135/85 for ages 0-60; 145/90 for ages 61+
Blood Pressure – With RX:130/75 for ages 18-60; 140/85 for ages 61+; control documented by minimum 3 readings in past 2 years; compliant with treatment, no problems with medications and no more than 2 medications needed for control; and no history of high cholesterol.
Cholesterol – Without RX: 220
Cholesterol – With RX: total cholesterol < 200 and (a) TC/h DL ratio < 4.5 or (b) LDL < 100; control documented by minimum of 3 readings in 2 years; compliant with treatment, no problems with medications, no more than 2 medications needed and one must be a statin; and no history of hypertension.
CHOL/HDL 4.5 *Requirements for PE with hyperlipidemia under treatment: total cholesterol < 200 and (a) TC/h DL ratio < 4.5 or (b) LDL < 100; control documented by minimum of 3 readings in 2 years; compliant with treatment, no problems with medications, no more than 2 medications needed and one must be a statin; and no history of hypertension. Serum Albumin Ages 70+ must be > 4
Family History (Coronary artery disease, stroke, invasive internal cancer of malignant melanoma. Cancer exceptions: basal cell and squamous cell skin cancer, any carcinoma in situ, and cancers in gender-specific organs when the relative is not the same gender as the proposed insured.) No occurrence of specified disease in parent or sibling before age 60
Alcohol/Drugs Never treated
Driving Maximum 1 moving violation in 3 years; no DUI, reckless driving in 10 years nor > 1 ever.
Aviation Regularly scheduled US-based airline only
AvocationsNone in 2 years except recreational scuba diving to maximum 50 feet.
Residency (Lawful permanent residents include US citizens, individuals granted permanent residency by the INS, and holders of acceptable temporary visas.) Lawful permanent resident of US for 3 years
Occupation No hazardous occupation
Military No active military duty.

Preferred Elite < $5,000,000

Blood Pressure – Without RX: 145/85 for ages 0-60; 150/90 for ages 61+
Blood Pressure – With RX:130/75 for ages 18-60; 140/85 for ages 61+; control documented by minimum 3 readings in past 2 years; compliant with treatment, no problems with medications and no more than 2 medications needed for control; and no history of high cholesterol.
Cholesterol – Without RX: 220
Cholesterol – With RX: total cholesterol < 200 and (a) TC/h DL ratio < 4.5 or (b) LDL < 100; control documented by minimum of 3 readings in 2 years; compliant with treatment, no problems with medications, no more than 2 medications needed and one must be a statin; and no history of hypertension.
CHOL/HDL 5.0 *Requirements for PE with hyperlipidemia under treatment: total cholesterol < 200 and (a) TC/h DL ratio < 4.5 or (b) LDL < 100; control documented by minimum of 3 readings in 2 years; compliant with treatment, no problems with medications, no more than 2 medications needed and one must be a statin; and no history of hypertension. Serum Albumin Ages 70+ must be > 4
Family History (Coronary artery disease, stroke, invasive internal cancer of malignant melanoma. Cancer exceptions: basal cell and squamous cell skin cancer, any carcinoma in situ, and cancers in gender-specific organs when the relative is not the same gender as the proposed insured.) No occurrence of specified disease in parent or sibling before age 60
Alcohol/Drugs Never treated
Driving Maximum 2 moving violations in 3 years; no DUI, reckless driving in 10 years
Aviation Regularly scheduled US-based airline only
AvocationsNone in 2 years except recreational scuba diving to maximum 50 feet.
Residency (Lawful permanent residents include US citizens, individuals granted permanent residency by the INS, and holders of acceptable temporary visas.) Lawful permanent resident of US for 3 years
Occupation No hazardous occupation
Military No active military duty.

Preferred

Blood Pressure: 140/90 for ages 0-60 (treatment allowed); 150/90 for ages 61-69 (treatment allowed); 155/90 for ages 70+ (treatment allowed)
Cholesterol: 250 for ages < 70 (treatment allowed); 325 for ages 70+ (treatment allowed)
CHOL/HDL 6.0 for ages <70 (treatment allowed); 6.5 for ages 70+ (treatment allowed) Serum Albumin Ages 70+ must be > 4
Family History (Coronary artery disease, stroke, invasive internal cancer of malignant melanoma. Cancer exceptions: basal cell and squamous cell skin cancer, any carcinoma in situ, and cancers in gender-specific organs when the relative is not the same gender as the proposed insured.) No death of parent or sibling from specified disease before age 60
Alcohol/Drugs Never treated
Driving Maximum 2 moving violations in 3 years; no DUI, reckless driving in 5 years
Aviation None except regularly scheduled US airline & best private pilots (Best private pilots are those with over 300 hours of experience flying 50-150 hours/year with instrument flight rating.)
Avocations Not excluded but flat extra may apply.
Residency (Lawful permanent residents include US citizens, individuals granted permanent residency by the INS, and holders of acceptable temporary visas.) Lawful permanent resident of US for 3 years
Occupation No exclusion but flat extra may apply
Military No active military duty below rank of commissioned officer.

Standard Select

Blood Pressure: 145/90 for ages 0-60 (treatment allowed); 155/95 for ages 61+ (treatment allowed)
Cholesterol: 285(treatment allowed)
CHOL/HDL 7.0 (treatment allowed)
Serum Albumin N/A
Family History (Coronary artery disease, stroke, invasive internal cancer of malignant melanoma. Cancer exceptions: basal cell and squamous cell skin cancer, any carcinoma in situ, and cancers in gender-specific organs when the relative is not the same gender as the proposed insured.) No more than 1 death of parent from specified disease before age 60
Alcohol/Drugs Not treated within 5 years
Driving Maximum 3 moving violations in 3 years; no DUI, reckless driving in 5 years
Aviation Not excluded but flat extra may apply.
Avocations Not excluded but flat extra may apply.
Residency (Lawful permanent residents include US citizens, individuals granted permanent residency by the INS, and holders of acceptable temporary visas.) Lawful permanent resident of US for 6 months
Occupation No exclusion but flat extra may apply.
Military No exclusion but flat extra may apply.

Standard No Tobacco

Blood Pressure: 155/95 for ages 0-60 (treatment allowed); 160/95 for ages 61+ (treatment allowed)
Cholesterol: 300(treatment allowed)
CHOL/HDL 9.0 (treatment allowed)
Serum Albumin N/A
Family History (Coronary artery disease, stroke, invasive internal cancer of malignant melanoma. Cancer exceptions: basal cell and squamous cell skin cancer, any carcinoma in situ, and cancers in gender-specific organs when the relative is not the same gender as the proposed insured.) No more than 1 death of parent from specified disease before age 60
Alcohol/Drugs Not treated within 5 years
Driving Maximum 3 moving violations in 3 years; no DUI, reckless driving in 2 years
Aviation Not excluded but flat extra may apply.
Avocations Not excluded but flat extra may apply.
Residency (Lawful permanent residents include US citizens, individuals granted permanent residency by the INS, and holders of acceptable temporary visas.) Lawful permanent resident of US for 6 months
Occupation No exclusion but flat extra may apply.
Military No exclusion but flat extra may apply.

Preferred Smoker

Blood Pressure: 140/90 for ages 0-60 (treatment allowed); 150/90 for ages 61-69 (treatment allowed); 155/90 for ages 70+ (treatment allowed)
Cholesterol: 250 for ages < 70 (treatment allowed); 325 for ages 70+ (treatment allowed)
CHOL/HDL 6.0 for ages <70 (treatment allowed); 6.5 for ages 70+ (treatment allowed) Serum Albumin Ages 70+ must be > 4
Family History (Coronary artery disease, stroke, invasive internal cancer of malignant melanoma. Cancer exceptions: basal cell and squamous cell skin cancer, any carcinoma in situ, and cancers in gender-specific organs when the relative is not the same gender as the proposed insured.) No death of parent or sibling from specified disease before age 60
Alcohol/Drugs Never treated
Driving Maximum 2 moving violations in 3 years; no DUI, reckless driving in 5 years
Aviation None except regularly scheduled US airline & best private pilots (Best private pilots are those with over 300 hours of experience flying 50-150 hours/year with instrument flight rating.)
Avocations Not excluded but flat extra may apply.
Residency (Lawful permanent residents include US citizens, individuals granted permanent residency by the INS, and holders of acceptable temporary visas.) Lawful permanent resident of US for 3 years
Occupation No exclusion but flat extra may apply
Military No active military duty below rank of commissioned officer.

Standard Smoker

Blood Pressure: 155/95 for ages 0-60 (treatment allowed); 160/95 for ages 61+ (treatment allowed)
Cholesterol: 300(treatment allowed)
CHOL/HDL 9.0 (treatment allowed)
Serum Albumin N/A
Family History (Coronary artery disease, stroke, invasive internal cancer of malignant melanoma. Cancer exceptions: basal cell and squamous cell skin cancer, any carcinoma in situ, and cancers in gender-specific organs when the relative is not the same gender as the proposed insured.) No more than 1 death of parent from specified disease before age 60
Alcohol/Drugs Not treated within 5 years
Driving Maximum 3 moving violations in 3 years; no DUI, reckless driving in 2 years
Aviation Not excluded but flat extra may apply.
Avocations Not excluded but flat extra may apply.
Residency (Lawful permanent residents include US citizens, individuals granted permanent residency by the INS, and holders of acceptable temporary visas.) Lawful permanent resident of US for 6 months
Occupation No exclusion but flat extra may apply.
Military No exclusion but flat extra may apply.