When is the Right Time to Replace an Insurance Policy in an ILIT? We Can Help You Decide
Among the many difficult decisions that irrevocable life insurance trust (ILIT) trustees need to make is to replace or modify in-force insurance policies. While replacing or modifying an existing policy can offer substantial benefits under the right circumstances, trustees cannot take recommendations from financial advisors and insurance agents on blind faith. As fiduciaries, trustees need to make informed decisions based upon the best interests of the trust’s beneficiaries. While this will mean replacing or modifying an existing policy in some circumstances, in others, it will mean maintaining the status quo.
But, how do you decide? How do you know when to follow a financial advisor’s or insurance agent’s recommendation, and how do you know when to say “No”? What are the risks involved on both sides, and how can you protect yourself while also effectively meeting your fiduciary obligations?
Replacement Analysis Reports for Proposed Insurance Policy Changes
To assist ILIT trustees with evaluating insurance policy replacement and change proposals, Insurance Trust Services, LLC provides comprehensive replacement analysis and reporting services. We offer these services on an as-needed basis, and we can provide quick turnaround times when necessary. In addition to evaluating proposed replacement policies, we assist with the administration of policy replacements as well—providing a full-service solution that eliminates uncertainty, mitigates risk, and ultimately reduces the costs associated with the fiduciary management of ILITs.
Our replacement analysis and related services include:
Analysis of proposed changes to in-force life insurance policies : if a change is being proposed to an in-force life insurance policy in an ILIT that is under your fiduciary control, we can assist you in analyzing the financial impacts of the proposal and Determining whether to implement the change.
Analysis of in-force policies and proposed replacement products : if a full replacement is being proposed, we can analyze both the in-force policy and the proposed replacement product to determine whether replacing the in-force policy as proposed serves the best interests of the ILIT’s beneficiaries.
Comprehensive replacement analysis reports : based on our analysis, we will provide a comprehensive replacement analysis report that is custom-tailored to the policy (or policies) and the trust. This report will contain all pertinent available information as well as our recommendations regarding the key factors you need to consider.
Beneficiary notice and consent administration : if the decision is made to modify or replace an in-force life insurance policy, we can assist you with all aspects of beneficiary notice and consent administration as well. Our services include but are not limited to sending notices of beneficiaries’ rights to withdraw property from the trust (Crummey letters).
Contact Us for More Information about Our Replacement Analysis Services
If you would like more information about our replacement analysis services for ILIT trustees, we encourage you to speak with one of our experienced team members in confidence. To schedule an appointment at your convenience, please call 561-241-9595 or contact us online today.
