Dealing with Non-Responsive Grantors

Dealing with Non-Responsive Grantors

Michael Brohawn, CFP, CLU, Chief Marketing Officer, ITM TwentyFirst
Jason Hassman,
ITM TwentyFirst

Often many Trust Owned Life Insurance (TOLI) trustees struggle with the issues surrounding policies held in trust where the grantor is now non-responsive. Typically, this occurs when a life changing event like a divorce occurs or when the grantor has significant financial setback or even mental issues. Even if the grantor is not responsive the trustee has the responsibility to manage the trust asset for maximum benefit of the beneficiaries. Dealing with these situations and maximizing beneficiary value while mitigating liability was the focus of this seminar.

Download Handbook Here: Handout Dealing with Non-Responsive Grantors in an ILIT

AXA Cost of Insurance (COI) Rates Increase

AXA will be raising the cost of insurance (COI) on a limited number of Athena Universal Life II policies, effective with the first monthly deduction that occurs on or after January 1st, 2016.  Like most other carriers raising costs, AXA is emphasizing the new rates will not exceed the guaranteed maximum COI rates as specified in the policy.
The Athena Universal Life II policy does contain a death benefit guarantee, the Lapse Protection Rider (LPR.)  The new COI rates will not increase the premium needed to keep the LPR in force, as long as no loans are taken on the policy and no changes are made to the policy.  Policies without the rider, will need additional premium to keep the policy from lapsing.
The increase is limited to policies originally issued to those over age 70 with face amounts of $1M or more. AXA is allowing those with face amounts above $1M to lower their death benefit below $1M so as to not be affected by the cost increase, though positive results should be reviewed because of banding and surrender charges.
AXA has already notified brokers, and letters to alert policyholders went out starting October 5th.  Illustrations with the new rates are available and AXA is waiving their illustration fee for the rest of the year for up to three policy inforce variations.
We will be reviewing the cost increase and will be publishing future Blogs with our results.  We have also scheduled a Webinar concerning the COI increases in general for later in October.  Visit our website at www.itm-twentyfirst.comfor more information.

Voya Financial Cost of Insurance (COI) Rates Increase

At ITM TwentyFirst, it is our goal to keep our clients informed of industry wide news that may affect how life insurance assets are managed now and in the future.

Voya Financial, in letters to clients that began about a month ago, announced cost increases in some of its Universal Life (UL) policies.  According to information from the carrier, the increases were in three areas:  Monthly Cost of Insurance, Percent of Premium Expense Charge – the “charge assessed as a percentage of each premium paid” and Monthly Expense Factor – a charge “based on the Accumulation Value of your policy”.
Voya, which rebranded from ING US in April of 2013, noted in an FAQ to clients that they “periodically review costs associated with their policies” and that the increases were “being made in response to an increase in the anticipated costs of providing future coverage”.  They noted that the increase will take effect on the “first Monthly Policy Date on or after October 1, 2015” and, like other carriers who have raised costs, provided options for the policyholders that include:  taking no action, paying a higher premium, reducing the death benefit or surrendering the policy.
In conversations with representatives from the carrier we have been told that the policies affected were “all Universal Life policies issued before 2009”.  We were also given the following list of policies affected by one or more of these increases:

  • Security Design I & III
  • Estate Design (RL) and NY
  • Life Design GUL
  • Premier Design
  • Strategic Accumulator UL
  • Select Design
  • GPUL (version 1, 2, and 3)

In reviewing the client letters that we have received so far the highest increase in monthly Cost of Insurance we have seen is 42.3%, but we are still analyzing the policies we manage to determine actual increases.  This is another notice from a major carrier of a cost increase and we will be monitoring the situation as we move forward.
ITM TwentyFirst is a leading provider of ILIT administrative services, life settlement portfolio services and medical underwriting. We are monitoring the impact of these changes for all ITM TwentyFirst clients.
If you would like more information please contact:

MIKE BROHAWN, CFP®, CLU
Managing Director
ITM TwentyFirst
mbrohawn@itm21st.com
TOLI Solutions

Banner and William Penn COI Increase for Select Universal Life Plans

Banner and William Penn announced they will implement a cost of insurance (COI) increase for select universal life plans effective August 1, 2015. For any plan affected, the increased cost of insurance will be reflected in the first monthly deduction following the effective date of the increase. The table below lists the plans for each company, the policy form numbers, the dates the policies were available for sale, and the effective date of the COI change. It also identifies the plans which included no-lapse guarantees.

Download PDF – Banner and William Penn COI Increase August 2015

USFL Nova & SuperNova UL Products: Increase in Cost of Insurance (COI) Rates

Effective on the first policy anniversary following August 31, 2015, the clients with Nova & SuperNova UL policies will see an increase in their schedule of cost of insurance (COI) rates. AXA is making this change because they are expecting future mortality experience to be less favorable than was anticipated when the current schedule of COI rates was established. However, rates will never be above the guaranteed maximum rates as specified in the policy.
AXA will be sending a letter to your clients, notifying them of the change in rates. They will copy the servicing agent on the client letters as well.

  •  Clients with policies that have September to December anniversaries will receive the letter in June 2015.
  • Clients with policies that have January to August anniversaries will receive the letter in August 2015.
  • AXA will also include a notice of the change in the policy’s annual statement from September 2015 through August 2016.

ITM TwentyFirst is a leading provider of ILIT administrative services, life settlement portfolio services and medical underwriting. We are monitoring the impact of these changes for all ITM TwentyFirst clients.

Download PDF – USFL UL Products Increase COI Aug 2015