Case Studies
Estate / Business
Solution
The founder of a construction equipment dealership had an estate plan in place that included three life insurance policies to provide funding for the repurchase of a company shares upon his spouse's death. Stock redemption proceeds would be used to pay estate tax. Having sold the business earlier this year, the original protection need was eliminated. The policy exit strategy selected was a life settlement.
Business Situations
An important food products company, in business for nearly 100 years, utilized high credit lines to support their operations. Since the bank required a personal guarantee of the business owner, over the years several key person policies were obtained. Once the owner retired and transferred the business to his children, these policies were no longer necessary. Rather than surrender the policies for no value, the policies were sold in a life settlement.
Affordability
Over the years, the policy owner took advantage of the flexible premium option by paying less than the originally illustrated premiums. The strategy worked reasonably well in a favorable market but in more recent years the premium has been increasing significantly annually. The policy had become unaffordable and the client, who was surrendering the policy, instead life settled for approximatly 2x the cash surrender value.
Expiring
Term Insurance
Long Term Care Benefit Plan
Three brothers owned a family business trucking company they had inherited from their long deceased father and uncle. They had bought business paid-for term life insurance policies for a buy-sell agreement in 2003. In about 2009, they sold the company and distributed the policies to themselves. One of the brothers had since died. One of the surviving brothers was about to turn 70, and both the 10-year rate guarantee period and the conversion period were ending. $1M of the coverage was converted and the balance was going to be allowed to lapse.
Retained Coverage Death Benefit
An individual had purchased $5M of coverage for estate planning purposes. When the clients situation changed, they called on their advisor to reduce the face amount of their life insurance policy.
Through Brookfield Partners, we were able to provide the client with an offer of $312,61 in cash and allowed him to retain $3.5M in Life Insurance coverage without having to pay any additional premiums.
Policy Type
Guaranteed Universal Life
$5,000,000 Coverage
No Cash Surrender Value in Current Policy
Mom and Dad wanted to move closer to their daughter and to enter an Assisted Living facility due to health concerns. Their daughter conducted some research was referred to Brookfield Parnters while searching for assisted living facilities.
Her parents sold their home to prepare for the move and applied convert to their $150,000 life insurance policy. Their daughter is a lawyer and worked closely with Brookfield Partnesr to assist her parents throughout the application and enrollment process to make sure everything went well for her parents. She was very impressed with how the Long Term Care Benefit Plan is administered, and her parents were able to quickly move into the assisted living community of their choice only a few minutes’ drive from her house.
Policy Type
Universal Life
$150,000 Coverage
$5,750 Current Cash Surrender Value
$45,000 Long Term Care Benefit Plan Offer
Monthly Benefit – $2,666.67
Benefit Period – 15 months
Funeral Expense Death Benefit – $5,000