Time Bombs: Not Just in Investments

"Ultimate ratings downgrades will be broad-based, potentially impacting over half of all insurance companies." - Fitch Rating Services

Attached is "Time Bombs: Not Just in Investments. Repercussions of Wall Street on Life Insurance and Its Impact on Current Holdings" which appeared in this month's Family Office Exchange (FOX) Connects.* It provides an overview of:

• the current state of the industry,
• its impact on policyholders, and
• critical misunderstandings that lead policyholders astray when analyzing both new and existing coverage.

After the turbulence of 2008, families are re-evaluating both risks and efficiencies in nearly every facet of their financial lives. Included in this process is the re-examination of their sources of exposure, levels of risk tolerance, and efficiency of all expenditures. Much of the planning done over past years may be rendered inappropriate, inadequate, or inefficient in light of the new realities. "I have done that and am in good shape" is no longer a prudent or acceptable statement.

This is especially true for life insurance. After losing significant portions of their net worth over the past year, families continue to mistakenly believe their insurance policies are their safe harbor...if they think of them at all. Unbeknown to most are the storm clouds looming over this industry. Though downgrades, failures, and M&A activity will be rampant, most carriers will survive in some form. Existing policies are unlikely to be as fortunate.

Clearly existing coverage must be re-examined, but the key is getting objective insight and advice. To be objective, it must be transparent in its consideration of advantages, risks, and conflicts of interest that may influence recommendations.

As such, THEInsuranceAdvisor.COM (TIA) provides such transparency through its objective, rules-based Confidential Policy Evaluator (CPE) system. CPE research reports measure the appropriateness of pricing, the reasonableness of performance expectations for invested assets underlying policy cash values, and overall suitability for your (clients') policies based on the 5 factors of suitability. For these reasons, THEInsuranceAdvisor.COM (TIA) is the most-accepted source for life insurance products research.

• Only THEInsuranceAdvisor.COM is endorsed by the New York Bankers Association (NYBA).
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• Only THEInsuranceAdvisor.COM supports the ILIT Trustee's duty to investigate the suitability of TOLI holdings (whereas other policy review offerings actually disclaim suitability)
• Only THEInsuranceAdvisor.COM benchmarks are derived from the industry's largest and most up-to-date database of pricing and performance information for life insurance products

Sign-up now to take advantage of the 90-day NO-Risk trial subscription and see how your existing policy measures up.  It is an easy-to-use tool that can help with your financial decisions.

*Special thanks to Michael Brink and Tom Love of Pelagos Advisors

*Michael J. Brink, CLU, AEP, is a principal of PELAGOS ADVISORS, LLC, a national life insurance advisory firm based in Atlanta. PELAGOS ADVISORS, LLC provides fiduciary level representation for life insurance, particularly as it relates to wealth enhancement and preservation planning for families of multigenerational wealth. For the past 14 years, he has served as Executive Vice President of a national life insurance advisory firm. and prior to that, he was Vice President and Regional Manager of a major southeastern bank trust company. Michael is a graduate of the University of Tennessee and holder of the Charter Life Underwriter (CLU) and Accredited Estate Planner (AEP) designations. He serves on the editorial board of Wealth Management Business magazine and is nationally published with over 20 articles appearing in Worth, CCH’s The Practical Estate Planner, The Journal for Compensation and Benefits Management, and others. In addition, his work regarding the integration of life insurance with philanthropy is used by the American College in their Philanthropic Advisor Certification program. Michael is also consistently ranked as a top speaker and has addressed numerous family office, insurance, banking, and tax seminars throughout the country. As a Strategic Advisor to FOX, Michael was deeply involved in the development of the first ever survey of the use of life insurance by the ultra affluent, the results of which were featured in Worth magazine in July 2007. Michael also serves as an advisor to the Institute for International Research (IIR) for their annual Family Office Forum and is a member of the Family Wealth Alliance, an organization of multifamily offices and advisors. In addition to other professional and community involvement, Michael is President of the Atlanta Estate Planning Council, Chairman of the Planned Giving Advisory Board for The Community Foundation of Greater Atlanta, and serves on the Advisory Board for the Cox Family Business Center at Kennesaw State University. He is a life and qualifying member of the Million Dollar Round Table, Top of the Table, and member of the Association for Advanced Life Underwriting (AALU) and Society for Financial Service Professionals. He is a registered representative of ValMark Securities, Inc., a registered broker/dealer, member of FINRA & SIPC.

*Thomas R. Love, CLU, FLMI, Principal is a graduate of the University of Georgia with a B.B.A. in Risk Management and Insurance with an Estate Management concentration. He holds the Chartered Life Underwriter (CLU) designation from the American College and the Fellow Life Management Institute (FLMI) designation from the Life Office Management Association (LOMA). He is a member of the Atlanta Estate Planning Council, Association for Advanced Life Underwriting (AALU), Society of Financial Service Professionals (SFSP) and the National Association of Insurance and Financial Advisors (NAIFA). Past industry service includes participation in a Broker Dealer Advisory Board, Technology Committee of a national life insurance producer group as well the Product Advisory Committee for a major national insurance carrier. Tom’s speaking engagements include the topics of The Impact of the 2001 Mortality Table and Split Dollar Administration. He has been published in Worth and the Journal of Practical Estate Planning. He holds the Series 6 and 63 securities licenses, and is a Registered Representative of ValMark Securities, Inc., a registered broker/dealer, member FINRA & SIPC.