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What’s Behind the Increase in Cost of Insurance Charges?What’s Behind the Increase in Cost of Insurance Charges?

How to proactively represent an ILIT trustee

Melvin A. Warshaw

March 23, 2016

15 Min Read
What’s Behind the Increase in Cost of Insurance Charges?

Some life insurance carriers have begun to announce increases in the cost of insurance (COI) on certain closed blocks of outstanding universal life (UL) products. “COI” refers to payments of claims and is the largest single cost incurred by life carriers. COI charges can account for 75 percent to 85 percent of the total premium. An increase in COI charges will have an immediate economic impact on non-guaranteed policies, forcing policyholders to make some hard economic decisions.  

As an advisor, what steps should you take to proactively represent an irrevocable life insurance trust (ILIT) trustee, who must look out for the best interests of the trust beneficiaries? Do you have clients or ILIT trustees who don’t know the COI charges on po...

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About the Author

Melvin A. Warshaw

Melvin A. Warshaw, Esq. is an international cross-border tax and private client lawyer based in Massachusetts. He is an ACTEC Fellow, an Academician of the International Academy of Estate and Trust Law and a member of the International Practice committee of the editorial board of Trusts and Estates.