Those of you with clients who have life insurance inside an Irrevocable Life Insurance Trust (ILIT) should have these policies reviewed for the following reasons:
1. Many times, term policies are used – inappropriately – to fund an ILIT. As you know, term insurance solves a temporary need while a trust is installed for a long-term/permanent issue. When the term policy runs its course, the client may be left with unsettling options.
2. Clients often fail to fund these policies adequately leaving the potential for the policy to lapse. An in-force illustration will project the “life” of the policy and show any funding deficiencies.
3. Some policies are purchased using inflated return assumptions and are especially in danger of lapsing if these rosy returns fail to materialize. This often occurs with Variable Universal Life (VUL) policies. These polices should be carefully analyzed and monitored.
For more information, please contact us: http://www.thriftytermquote.com/contact-us/