Programmed premium payments provide preferred payoffs

Article Abstract:

Premium deposit funds can provide many benefits to clients including automatic payment of insurance premiums, tax-deferred interest and better performance than many financial instruments. Clients' premium payments are split between the insurance and the deposit fund allowing for programmed premium payments while the clients have access to the deposit fund money which is accruing interest. Besides the financial benefits, the deposit funds provide a convenient way to make premium payments and can even comply with the 1988 Technical and Miscellaneous Revenue Act.

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New guidelines for vanishing premium disclosure: what underlies the suggested wording

Article Abstract:

The American Society's Professional Practice Guideline Task Force has issued new disclosure guidelines for the sale of vanishing premium life insurance because previous techniques did not adequately inform consumers. The new guidelines require disclosure of the potential for increased premiums if dividends do not cover the necessary payments. They also state that the vanishing premiums are not guaranteed and relate to dividend scales and crediting rates that may change over time. Model statements are included.

Prices and rates, Insurance

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Low cost buy-sell funding with joint life first-to-die

Article Abstract:

A joint life first-to-die insurance policy is a cost effective way to fund a buy-sell agreement held by a corporation on its two shareholders. However, a cross purchase agreement, where the buy-sell agreement is between two shareholders, must be carefully designed to avoid transfer for value violations and double inclusion in the first-to-die's estate of the business interests and insurance proceeds.

Management, Taxation, Buy-sell agreements

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