Using split dollar can solve estate planning problems

Article Abstract:

Second-to-die life insurance, when combined with split dollar, offers benefits to an estate planner. It allows estate owners to use business funds to shoulder estate tax costs and reduce income tax. Estate owners can also buy second-to-die coverage through a company at reduced rates. A special table called US38 enables an individual to avail of a second-to-die coverage at a lower cost than the PS58 table allows. In addition, second-to-die policies reduce the value of a gift made to the estate owner's trust, resulting in lower gift tax.

Tax Management, Estate Planning, Methods, Analysis, Management, Taxation, Tax accounting, Estate tax, Estate taxes, Gift tax, Split-dollar life insurance, Split dollar life insurance

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World of underwriting continues to evolve

Article Abstract:

Life Insurance underwriting has changed to include more complex health tests and more brokering of business. The career agent who wrote policies after submitting a client's medical exam to one company has become rare. The standard practice in the 1990s is for agents to require blood tests and to ask about other factors such as driving record and recreational activities, then submit that information to several companies. The brokering aspect creates more competition and less consistency in the evaluation of clients.

Column, Practice

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Level commissions can affect underwriting

Article Abstract:

Level commissions in life insurance are driven by consumerism because of complaints about replacement policies and investigations by state insurance departments. Level commissions would also ensure that lapse rates were not so high. Level commissions would decrease the high rate of replacement business because a large first-year commission would not become necessary. It is difficult to recruit new employees.

Insurance industry, Compensation and benefits, Life insurance industry

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