Tag Archive for: life insurance

The Acumen Team

Permanent Life Insurance: What Options Are Available to You?

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When it comes to life insurance, there are two main categories: Term life insurance and permanent life insurance. Today, David Jacobs, J.D., Principal at Acumen Insurance Solutions will be discussing permanent life insurance; more specifically, what options are available to you?

Let’s dive in.

What is Life Insurance?

First things first, what is life insurance?

Life insurance is a contract between a policy owner and a life insurance company. In this contract, the life insurance company promises to pay a designated beneficiary a death benefit upon the passing of the insured.

As we mentioned, when it comes to life insurance, there are two main categories: term life insurance and permanent life insurance. Remember that, no matter which type you own, the death benefit is generally paid income tax-free to the beneficiaries. 

Now, let’s focus on the different types of permanent life insurance options available.

Permanent Life Insurance: The Basics

Permanent life insurance, sometimes also referred to as whole life insurance, is designed to last for your lifetime, not just for a period of years. Since it’s designed to last for your entire lifetime, permanent life insurance is more expensive than term.

Permanent life insurance has the benefit of lasting longer than term, with premium flexibility and a cash value. The cash value is tax-advantaged and serves as a living benefit that the policy owner can access for any reason before the insured has died.

Three components make up permanent life insurance:

  • Premiums
  • Cash value, and
  • Death benefit

When you make a premium payment, what happens? Well, part of that premium goes to pay for the cost of insurance, or rather the cost to insure your life for the death benefit amount, as well as for policy fees, state premium taxes, and commissions.

The remainder of their premium goes into your cash value account, which can grow for you to use for any purpose at a later time.

Some of the main differences between the types of permanent policies have to do with what mechanism grows that cash value account.

Let’s discuss.

Types of Permanent Life Insurance

There are a few different types of permanent life insurance contracts to note. Again, the main difference between them is how the cash value (the living benefit account) grows.

Remember that, no matter which type of permanent insurance you own, the cash value grows tax-deferred and can be accessed tax-free using policy loans and withdrawals.  

Whole Life Insurance

A whole life policy cash value grows based on a guaranteed interest rate plus a non guaranteed dividend that the insurance carrier declares every year. Dividends are positively-correlated to interest rates and move slowly over time.

Universal Life Insurance

With a universal life insurance policy, the cash value grows based on a crediting interest rate that the insurance company declares annually, and is also positively-correlated to interest rates. 

Index Life Insurance

With an index universal life policy, the cash value grows based on the performance of a specific stock or bond index; typically it’s the S&P 500, however, other index accounts are available.

Index life policies are not directly invested in the market but instead track the movement of the chosen index.

Typically, index policies have a floor and a cap mechanism. For example, if the index declines over a policy year, the cash value is credited at a 0% gross rate to protect against downside risk; but, if the index increases, the cash value is credited at that rate, up to the cap. It’s like investing with guardrails. Caps can vary among carriers and usually float on an annual basis.

Variable Universal Life Insurance

The last type of policy is called a variable universal life policy. Variable life policyholders use mutual-fund-like sub-accounts to grow the cash value. Policy owners are accepting market volatility in exchange for the opportunity to potentially earn higher returns.

These types of policies are considered securities by the Securities and Exchange Commission (SEC), whereas whole, universal, and index are considered general account policies.

Infographic of Permanent Life Insurance What Options Are Available to You

Learn About Term Life Insurance Next!

We hope this discussion delineated the differences between term life insurance and permanent life insurance, and that you learned more about the types of permanent life insurance that are available on the market today.

Interested in learning more about the second category of life insurance, term life insurance? Read on in our article “Insurance 101: Term Life Insurance vs. Permanent Life Insurance.”

Important Notes: Please refer to 26 U.S. Code §101(a) regarding tax-fee death benefit and 26 U.S. Code § 7702 (a) (g) regarding tax treatment of cash value. Policy performance is based on current rates as charges, and some values are not guaranteed. Medical and financial underwriting is required. Withdrawals and loans from life insurance policies classified as Modified Endowment Contracts (MEC) may be subject to income tax and a federal tax penalty, if taken prior to age 59½. Excessive policy withdrawals and loans may cause the policy to lapse, which will result in the loss of death benefit and adverse tax consequences. Life insurance is backed by the claims-paying ability of the carrier and is not FDIC insured. See policy illustration for details. Acumen Insurance Solutions, LLC does not provide tax, legal, or investment advice, and is not FINRA registered.

The Acumen Team

Life Insurance 101: Difference Between Buy-Sell and Key-Person

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Welcome to Life Insurance 101. We’re here to make things simple for you. Today, we have ​​David A. Jacobs, J.D., Principal at Acumen Insurance Solutions on camera to discuss the difference between buy-sell and key-person insurance.

Let’s dive in.

What is Buy-Sell Life Insurance?

Buy-sell life insurance is different from key-person (or key-man in the old days) life insurance. Buy-sell life insurance is used to protect a departing owner and his/her heirs, as well as the business and its remaining owners.

An Example of Buy-Sell Life Insurance

Let’s say Bob and Rick are in business together; they are 50-50 owners. Bob happens to pass away unexpectedly. In this case, Rick would then be in business with Bob’s beneficiaries, which is likely not an ideal situation for any party.

Therefore, the payout from a life insurance policy on Bob’s life is used as a way for Rick (or the business) to immediately obtain the financial resources necessary to buy out Bob’s beneficiaries, and vice versa. This way, Bob’s beneficiaries walk away with cash, and Rick with the shares of the business.

Make sense?

What is Key-Person Life Insurance?

Key-person life insurance, on the other hand, provides money to the business that’s lost a key employee which can be used to help replace lost revenue and offset costs to identify and train a replacement.

When Do You Use Buy-Sell Life Insurance?

There’s often a legal agreement between partners in a business—a shareholders’ agreement. The buy-sell portion of this agreement dictates what happens when a triggering event occurs and ownership needs to change hands.

These triggering events, to name a few, might include:

  • Death
  • Disability
  • Divorce of a partner, or
  • Retirement

Regardless of the triggering event, the organization and/or the partners need to have the funding available in order to buy out the departing partner or the departing partner’s heirs, if necessary.

Life insurance is a great way to do that. 

Infographic of Life Insurance 101: Difference Between Buy-Sell and Key-Person

Using Permanent Life Insurance to Fund Buy-Sell

Permanent life insurance (whole, universal, index, and variable) with cash value can help you handle all of those triggering events, whether the departing owner leaves due to death or another reason.

If an owner happens to pass away, the life insurance death benefit is used. However, if another triggering event occurs, the life insurance cash value can be tapped in order to meet that obligation and prevent using company cash flow or having to borrow at high interest rates.

The Importance of Life Insurance

Even if you don’t have a business partner, it’s important to make sure you protect your family by having insurance on your life for the current value or projected value of your business. If you pass away unexpectedly, your family will lose the income you generated and the value of your business will likely decline or perhaps disappear. It would be a shame for your family to not be able to reap the rewards of your hard work if you’re no longer there.

Interested in learning more? Check out another one of our Life Insurance 101 topics: Term Life Insurance vs. Permanent Life Insurance.

The Acumen Team

Term Life Insurance vs. Permanent Life Insurance

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An Insurance 101 Series

Welcome to Life Insurance 101. We’re here to make things simple for you. Today, we’ve got ​​David A. Jacobs, J.D., Principal at Acumen Insurance Solutions on camera to discuss the difference between term life insurance and permanent life insurance in a way you can understand.

Let’s dive in.

What is Life Insurance?

Life insurance is a contract between a policy owner and a life insurance company. In this contract, the life insurance company promises to pay a designated beneficiary a death benefit upon the passing of the insured.

Most of the time, that death benefit is paid income tax-free to the beneficiary.

Term Life Insurance vs. Permanent Life Insurance

Interestingly enough, life insurance comes in a couple of different flavors. There are two main categories of life insurance: the first is called “term” life insurance, and the second is known as “permanent” life insurance.

The main difference between permanent and term insurance is that permanent insurance is designed to last for the insured’s lifetime and permanent insurance has a tax-advantaged cash value component.

But more on this later! Let’s discuss each individually.

Term Life Insurance

Term life insurance is exactly what it sounds like. It is life insurance that’s for a period of years; typically 10, 15, 20, or 30 years.

When it comes to term life insurance, there are only two components:

  1. The premium that’s due either every year, quarter, or month, and
  2. The death benefit, which is paid when the insurer dies within that term

Generally, premiums are level and the death benefit is guaranteed for that period. At the end of the term, the insurance policy stops, and the benefit is gone.

Lastly, some term life insurance policies have a special benefit that allows you to “convert” the term insurance to a permanent insurance policy without medical underwriting.

This can be a tremendously beneficial feature if the insured experiences a health issue that would prevent them from being able to qualify for new insurance after the term policy ends. These convertible term policies tend to cost more and require more effort to find than traditional term policies, but can be worth it depending on your unique circumstances and desires.

Permanent Life Insurance

The second type of insurance category is permanent insurance. The terms “permanent” and “whole life” insurance are sometimes used interchangeably.

Just as the name implies, permanent life insurance is designed to last for the insured’s lifetime, not just for a period of years. Since it’s designed to last longer, permanent life insurance is more expensive than term.

Permanent life insurance, however, has the benefit of a) lasting longer and b) having a cash value component. The cash value can be accessed for a variety of reasons and grows without tax.*

A Permanent Life Insurance Policy’s Cash Value Component

Let’s discuss more about the cash value component that is unique to permanent life insurance.

The cash value component of a permanent life insurance policy is available to the policy owner while the insured is alive, and grows tax-deferred. This cash value component can be accessed tax-free using either policy loans or a withdrawal of the principal.

This cash value component allows the policy to last as long as the policyholder wants it to. Permanent insurance is similar to a car; the more gas you put in, the longer it will drive. The same thing goes for permanent life insurance: the more premium you put into the policy, the longer the policy will last and the more cash value it will build.

Now, let’s briefly discuss the different types of permanent life insurance.

Types of Permanent Life Insurance

There are a couple of different types of permanent life insurance contracts to note, including:

  • Universal life
  • Index life
  • Whole life
  • Variable universal life

The difference between them all is how the cash value (the living benefit account) grows. For example:

  • Does it grow based on a dividend? That’s a whole life policy.
  • Does it grow based on an interest rate calculation or declaration? That would be a universal life policy.
  • Does it follow an index, for example, the S&P 500, but with a “floor” and a “cap” mechanism? That would be an index policy.
  • Or, does it involve the market (i.e. mutual fund-like accounts)? That would be a variable universal life policy.

Regardless, all of these policies have the same feature; as long as you continue to pay premiums and cash value remains in the policy, it will last until the death of the insured.

In the meantime, however, the policy owner can reach in and use the cash value for a variety of purposes. For example, it can be used to help pay premiums in certain years, fund education needs, supplement retirement, and/or support healthcare costs, all without triggering tax.

These are all things that the policy owner can use the cash value for while the insured is still alive.

Read on to learn more about the specific permanent life insurance policies available to you.

Infographic for Term Life Insurance vs. Permanent Life Insurance

A Recap on Term Life Insurance vs. Permanent Life Insurance

To review, the differences between term and permanent are:

  • Term life insurance lasts for a period of years and has two components: a premium and a death benefit.
  • Permanent life insurance lasts as long as you want it to (typically a lifetime) and has three components: a premium, a death benefit, and a cash value.

No matter what type of life insurance you own, however, it is an asset. Moreover, it is an asset class that needs to be reviewed, monitored, and serviced regularly. Why? To make sure that the policy is keeping up with your goals as well as to make sure that the industry and the policy are still performing as anticipated.

Read on to learn about the question, “Can I Change My Life Insurance?”


Important Notes: Please refer to 26 U.S. Code §101(a) regarding tax-fee death benefit and 26 U.S. Code § 7702 (a) (g) regarding tax treatment of cash value. Policy performance is based on current rates as charges, and some values are not guaranteed. Medical and financial underwriting is required. Withdrawals and loans from life insurance policies classified as Modified Endowment Contracts (MEC) may be subject to income tax and a federal tax penalty, if taken prior to age 59½. Excessive policy withdrawals and loans may cause the policy to lapse, which will result in the loss of death benefit and adverse tax consequences. Life insurance is backed by the claims-paying ability of the carrier and is not FDIC insured. See policy illustration for details. Acumen Insurance Solutions, LLC does not provide tax, legal, or investment advice, and is not FINRA registered.

The Acumen Team

Knowing Your Life Insurance Options

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Life insurance can be a crucial tool for:

  • Tax planning
  • Spousal protection planning
  • Wealth transfer planning, and
  • Business planning

However, as your personal and financial situation changes over time, so could your need for coverage. It is important that you know all your options regarding your life insurance, as well as when to audit your life insurance, so you can make informed decisions as to how to handle this valuable asset. You may have just one policy, or several life insurance contracts of varying types and designs. 

Let’s discuss your life insurance options.

Life Insurance Options

Below are the four primary options available regarding your life insurance.

Option #1: Continue Your Coverage

If you still need life insurance to meet your planning goals or if your health has deteriorated, you may wish to retain your coverage. Some policies allow for premium flexibility and reduction in policy size. 

Option #2: Stop Paying Premiums and Let Your Coverage Lapse

Seniors over the age of 65 lapse over $100 billion of life insurance coverage every year. Your premiums will end but so will your life insurance coverage when it eventually lapses. 

Option #3: Surrender Your Policy

You can surrender your policy to the insurer and cancel your coverage in exchange for the cash surrender value (permanent policies only).

Option #4: Sell Your Policy via a Life Settlement

If your permanent (whole, universal, index, or variable life) policy qualifies, you can sell it to an investor group who will pay you an amount in excess—sometimes four to five times—of the cash surrender value, in exchange for paying future premiums and eventually collecting the death benefit. Some convertible term policies can also qualify so it could be worthwhile checking before you let it lapse.

Make sure you fully understand the potential tax consequences of lapsing, surrendering, or selling your life insurance policy before moving ahead. 

The Importance of Auditing Your Life Insurance Policy

In addition to knowing your options, it’s just as important to regularly audit your life insurance coverage.

Why? Taking the time to review and understand your existing policies can help you:

  • Reduce carrier and contract risk
  • Check that you are carrying the right amount and type of coverage
  • Ensure the policies are owned by the correct person or entity
  • Consider new policy features, such as critical illness coverage, and
  • Improve overall policy earnings over time

Remember, over the years, life insurance contracts have changed, become more efficient, and regularly offer different features and benefits. Today’s policies are different even compared to those purchased just a few years ago.

This considered it makes sense for every policy owner to periodically take a look at their existing life insurance contracts and make adjustments accordingly.

Infographic of Knowing Your Life Insurance Options

Let’s Develop a Plan – Together

Knowing your options is key. At Acumen Insurance Solutions, our trusted advisors have decades of experience to help you develop a customized plan. Please contact us for a complimentary policy review so we can help you reach your goals.

Interested in learning more? Read on for more about auditing existing life insurance plans for credit unions or the difference between term life insurance and permanent life insurance.

The Acumen Team

How to Maximize Your Legacy Using Life Insurance

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An efficiently designed gifting program funded with life insurance can help you to transfer your wealth, limit your exposure to transfer taxes, and maximize your financial legacy.

Read on to learn how combining a gifting strategy with an irrevocable life insurance trust (ILIT) can help you to make the most of your legacy.

Transferring Wealth and Enhancing Legacies: Annual and Lifetime Gifts

One of the best ways to enhance your legacy and minimize your exposure to transfer taxes is by combining:

  • A gifting strategy, and
  • An irrevocable life insurance trust (ILIT)

An ILIT is an effective estate tax reduction technique. Gifting, combined with an ILIT, allows you to meet other planning goals such as avoiding probate and increasing creditor protection. Additionally, an ILIT gives you greater control and flexibility over how your assets will be distributed.

Moreover, a lifetime gifting strategy, in conjunction with life insurance, may also increase the total amount passed on to your heirs.

Let’s discuss how U.S. transfer taxes can affect these life insurance strategies. 

Understanding U.S. Transfer Taxes

The U.S. federal government imposes a tax on the transfer of wealth above certain amounts. There are three distinct types of “transfer taxes” that may apply: 

Estate Tax

On the transfer of property at death.

Gift Tax

On the transfer of property during life.

Generation-Skipping Transfer (GST) Tax

On the transfer of property (during life or at death) to individuals who are more than one generation removed from the donor, commonly referred to as “skip persons” (e.g., a grandchild).

In addition to federal taxes, several states impose a state-level estate tax or inheritance tax, depending on where you live or own property.*

Maximizing Your Legacy Using Life Insurance

So, this considered, what can you do? What tools are available to you to maximize your legacy? Life insurance can be a perfect fit.

Implementing a gifting plan to fully utilize your available exemptions can help to significantly minimize or eliminate exposure to estate taxes.

One very efficient strategy is to make gifts to an ILIT using annual exclusion gifts and/or some of your lifetime exemption and have the ILIT trustee use the gifted funds to purchase life insurance. The steps are as follows:

  1. Your attorney drafts an ILIT.
  2. You fund the ILIT with annual exclusion gifts of $16,000 (in 2022) for each beneficiary of the trust, which can include children and grandchildren. You may use your lifetime exemption to gift larger amounts to the trust. 
  3. The ILIT trustee purchases an insurance policy on your life (or the joint lives of you and your spouse). The ILIT is the policy owner and beneficiary, with premiums paid from the gifted funds.
  4. At your death, the ILIT receives the death benefit free from income, estate, and GST taxes. By funding the ILIT with life insurance, you not only remove the gifted assets from your estate, but the policy’s death benefit creates an income tax-free pool of money, potentially increasing the overall benefit you pass on.

How Life Insurance Can Help

Life insurance can offer a variety of benefits. Some include the following:

  • Income tax-free death benefit: Death benefit is received income tax-free and can be used to help pay estate taxes (if any) and secure a legacy for your beneficiaries.1
  • Access to tax-free income: Cash value that accumulates inside a permanent life insurance policy can be accessed tax-free and distributed to beneficiaries.2
  • Competitive rate of return: Life insurance death benefit can provide a higher net rate of return compared to other options through life expectancy.3

Gifts may be made directly to beneficiaries or to a trust. When gifted to an ILIT, the assets will be excluded from estate tax for multiple generations (in many jurisdictions), and the trust structure provides additional benefits4,  including:

  1. Enhanced inheritance protection
  2. Flexibility and access
  3. Easy funding
  4. Increased creditor protection
Infographic of How to Maximize Your Legacy Using Life Insurance

What We Do

At Acumen Insurance Solutions, we know that a properly designed gifting program funded with life insurance can help you transfer wealth and enhance your legacy. Interested in learning more? Read on to learn the difference between term life insurance and permanent life insurance.

*Check your state’s regulations to verify what state-level estate tax or inheritance taxes are imposed.

Footnotes

1 Life insurance death benefit proceeds are generally excludable from income tax, with a few exceptions including transfer for value.

2 Loans and withdrawals will reduce the death benefit and cash surrender value and may cause the policy to lapse, which may cause recognition of taxable income. Policies classified as MECs may be subject to tax when a loan or withdrawal is made plus a 10% federal tax penalty if taken prior to age 59 1⁄2.

3 IRR on death benefit is equivalent to an interest rate at which an amount equal to the illustrated premiums could have been invested outside the policy to arrive at the net death benefit of the policy.

4 Acumen Insurance Solutions is not a law firm and does not provide tax or legal advice. Please consult your tax and legal professionals.

Couple walking along the beach
The Acumen Team

Can I Change My Life Insurance?

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Secret’s out—life insurance is not a one-and-done deal. Contrary to popular belief, you can change your life insurance policy and your coverage amount throughout your life as your situation inevitably changes.

But why would you want to change your life insurance in the first place? What elements can you change? 

Let’s discuss.

Why Would I Change My Life Insurance?

There are many reasons why one might decide to change their life insurance coverage. Some policyholders might modify their life insurance to:

  • Reduce their premiums to an affordable amount
  • Find a policy with features better suited to meet their current needs
  • Update the amount of coverage

Additionally, there are various life events that might trigger changing one’s life insurance policy. These changes include, but are not limited to:

Changes in Career

This might include a career change, business ownership change, or the decision to launch a new company. 

Changes in Family Circumstances

Marriage, divorce, the arrival of new children or grandchildren, a family member’s death, and the need to care for one’s aging parents, are all reasons why one’s life insurance policy might need to be revisited.

Changes in Health

A policyholder might want to change their life insurance if the insured experiences a significant change in health, either positive or negative, or has a greater need for other features like living benefits.

Policy or Industry Changes

There can also be policy or industry changes that might prompt one to change their life insurance, such as updated mortality tables, and new product features and benefits. In addition, changes to tax laws – especially inheritance taxes – can increase or decrease the need for life insurance.

Infographic for "Can I Change My Life Insurance?"

What Can I Change About My Life Insurance?

So, we’ve addressed the fact that life insurance can be changed — but what about it can be changed?

As the policyholder, you are in control of the choices you make regarding your life insurance policy, whether it’s your life or someone else’s that is insured. This might include:

  • Buying additional life insurance coverage
  • Amending your life insurance policy with your current carrier
  • Canceling or selling your insurance policy and finding a policy better suited to your current needs
  • Withdrawing money from your plan

There are many reasons to both change, and not change, your existing policies. Some of these reasons include:

Reasons to Keep My Life Insurance

  • Competitive rates of return on dollars invested
  • Tax-favored characteristics and benefits 
  • Preservation of favorable health status
  • Changes in tax laws
  • Wait out surrender charge periods
  • Explore life settlement options

Reasons to Change My Life Insurance

  • Rising premiums
  • Outdated features and benefits
  • Unfavorable contract guarantees
  • Policy type is no longer aligned with current risk or need profile
  • Carrier quality concerns
  • Lack of underwriting upgrade programs

The bottom line? Life changes, and as it seems, life insurance policies are actually created with this fact in mind. The life insurance plan you structured 10 years ago isn’t irrevocable.

The Importance of Auditing Your Life Insurance Policy

Life insurance policy audits should be a part of your routine checklist. This includes taking a look at your existing policy’s premiums, death benefit, and guarantees as well as its current cash and surrender value.

But why do you need to audit existing plans? Improving an existing life insurance policy can mean:

  • Reducing risk;
  • Improving yields on premium dollars invested; and, 
  • Achieving peace of mind knowing that your affairs are in order. 

Part of our job at Acumen Insurance Solutions is to routinely audit our clients’ life insurance policies to ensure coverage continues to meet client needs. Get in touch today and read on to learn more about the importance of auditing your existing life insurance plan.

*Disclaimer: Life insurance policies are based on the claims-paying ability of the underlying insurance carrier and are not FDIC-insured. Pricing can be based on many factors, including the insured’s age, gender, health, and state of issue. Please refer to a current policy illustration for details.

Stack of one hundred dollar bills
The Acumen Team

CUOLI: How to Earn More Safely

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Credit unions typically keep significant liquid, short-term assets on their balance sheets, but the yield on these assets is minimal in today’s low interest rate environment and fails to provide a meaningful impact on current income.

Credit union-owned life insurance (COLI/CUOLI) is an important strategy that can help your credit union earn high yields safely. 

Let’s discuss.

What is Credit Union-Owned Life Insurance?

Firstly, what is credit union-owned life insurance?

COLI or CUOLI is a single premium life insurance contract where the credit union is both the owner and beneficiary of the policy.

Credit unions use this life insurance strategy to offset the cost of employee benefits and executive compensation plans, as well as generate higher current yields compared to other options while preserving safety and liquidity.  

COLI policies insure the lives of your executives and/or key employees. Similar policies, called bank-owned life insurance (BOLI), have been used by commercial banks for over 40 years.

Why Do CUs Purchase COLI/CUOLI?

Credit unions are in search of higher yields without taking unnecessary risk — and have been for decades.

Historically low interest rates have put pressure on credit unions to find yield. However, excess funds and liquidity make finding yield difficult for credit unions. While life insurance has always been a popular asset for banks to have on their balance sheets, credit unions have also been drawn to this asset for CUOLI’s safety, stability, and yield.

So, what’s the solution? Credit union-owned life insurance.

As an asset class, CUOLI can help mitigate interest rate and price risk, providing a less volatile return to the credit union. Additionally, credit unions are finding that returns on CUOLI are higher than other, more traditional options.

Let’s illustrate what this looks like in action.

COLI/CUOLI in Action

Situation: A $4 billion credit union wants to earn more on its cash and short-term investments, and protect itself from the unexpected passing of its key executives.

Action Steps: After considering several options, the board decides to fund institutionally-designed credit union-owned life insurance (CUOLI/COLI) policies, issued by top-quality carriers.

Designed and placed by Acumen Insurance Solutions, the policies hold high cash values while insuring the lives of the credit union’s executives. The program this credit union selected uses two different types of life insurance policies – one with a fixed rate and the other with a floating rate. Both have principal guarantees.

The Results: As a result of implementing a COLI policy, the credit union is now receiving:

  • A 4% annual net rate of return from the fixed policy and a 5% (average) return from the floating rate policy, while preserving safety or liquidity
  • Yields that increase as interest rates rise
  • Additional key-person death benefit protection on the CEO, CFO, and CCO that will be paid to the organization
  • The ability to contribute more in the future to these policies, if desired
  • Compliance with FASB ASU 2016-01

A Final Word

At Acumen Insurance Solutions, we have pioneered “institutional” designs that maximize performance while minimizing the out-of-pocket expenses associated with the acquisition of “retail” life insurance.

We recognize that credit union-owned life insurance is a great way to earn a higher current yield without sacrificing safety or liquidity while acquiring life insurance protection on key people.

Read on for more benefits of credit union-owned life insurance.