The Value of Permanent Life Insurance in Wealth Management

Does permanent life insurance have a role in professional wealth management? In this conversation, we discuss the basic features of a permanent life insurance policy that affect pricing and value over time. We discuss the elements of a policy, how to evaluate product structures, tradeoffs of investment types within an insurance wrapper, the unique value of an insurer's general account portfolio, what to do with a mature policy as a fiduciary, expenses, mortality pools, and the tax deferral benefits offered by the product structure. While permanent life insurance is often a polarizing financial product, in reality life insurance is simply a product design with a unique set of tax advantages that can be a valuable tool for higher-income, high-net-worth clients.