Advanced Planning Life Insurance Strategies

This course is designed to give financial and insurance professionals a guide to three advanced planning life insurance: The Myths in Buying Term and Invest the Difference; The Spousal Lifetime Access Trusts and The IRA Rescue Program using life insurance. The course will begin with an overview of the life insurance marketplace. It then will explain the myths in the strategy of Buying Term and Invest the Difference (BTID). For decades, the rallying cry of the financial advice industry has been for clients to buy inexpensive term life insurance rather than more expensive cash value accumulation policy like whole life insurance and/or variable universal life and invest the premium savings on their own. The only problem is most clients never execute the second part of the equation, leaving many of them uninsured in later life and unprepared for retirement. Next, it presents the complex rules governing the Spousal Lifetime Access Trust (SLAT) and how to leverage life insurance inside an Irrevocable Life Insurance Trust (ILIT). The SLAT provides access to Trust’s assets (the cash value of the life insurance policy) during the beneficiary’s lifetime and provides a death benefit outside the estate of the grantor and beneficiary. The SLAT also protects those clients who live in states that decoupled from the current federal applicable exclusion amount. There will also be a discussion of how to avoid the reciprocal trust doctrine. The final section presents a strategy on how to leverage the use of life insurance to prepare for the possible tax law changes on Inherited IRAs that will force distributions within a 5-year period and not over the beneficiary’s life expectancy. Distributions from the IRA will be gifted to an ILIT to purchase either a second-to-die policy or other types of insurance.