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Use this slideshow (the same presented to the Board of the New York Bankers Association that lead to their endorsement of the prudent process described therein) to help trustees understand...
  1. Why trust-owned life insurance (TOLI) has thus far been so neglected by ILIT trustees.
  2. How to treat TOLI holdings like other trust assets that are already managed and for which trustees are already charging fees.
  3. That the path to this understanding is actually a familiar one, a path that trustees have been down before.
  4. How the Prudent Investor Act is the road map to both compliance and profitability for ILITs.
  5. How to generate value to their ILIT clients for which trustees can charge an assets-under-management (AUM) fee using an actual case study.

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Use a copy of the Uniform Prudent Investor Act (UPIA) to help trustees understand there are 3 distinct duties under the Act, namely:
  1. To monitor TOLI holdings [see page 10 of the Act],
  2. To investigate the suitability of TOLI holdings [see page 10 of the Act] so as to justify TOLI expenses [see Section 7 on page 14 of the Act] and set reasonable expectations as to the rate of return on invested assets underlying TOLI cash values [see Section 2(c) on page 7 of the Act].
  3. To manage TOLI holdings as a prudent investor would [see Section 2(c) on page 7 of the Act] to minimize costs and maximize benefits relative to risk tolerance (and demonstrate that such is not your opinion to be considered against someone else's opinion but instead the law of the land in 44 states).
  4. Click Here to see if your state has adopted UPIA.
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Use the "Prudent Investor and TOLI" guide/series published by the American Bankers Association in their Trusts & Investments magazine to show ILIT trustees how to apply the Prudent Investor Act to trust-owned life insurance (TOLI) and how to support the 3 duties thereunder where...
  1. The duty to monitor TOLI holdings is supported by various third-party administrators (TPAs) like Informa InsuranceIQ (f/k/a Investment Scorecard® and Advicon before that), Resource Insurance Consultants (RIC) and TrustBuilder (in alphabetical order).
  2. The duty to investigate the reasonableness of both A) TOLI expenses as to cost of insurance charges (COIs), fixed administration expenses (FAEs), cash-value-based "wrap fees" (M&Es) and premium loads and B) performance expectations and thus the suitability of TOLI holdings which is supported by THEInsuranceAdvisor.COM research.
  3. The duty to manage TOLI holdings as a prudent investor would to minimize costs and maximize benefits relative to risk tolerance is supported by the Insurance Banker® (f/k/a the life insurance agent or broker) of the ILIT Trustees choosing.

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Use this "Complying with UPIA...Easy as 1, 2, 3" brochure to help trustees understand and remember that UPIA requires 3 essential ingredients... 1=monitor, 2=investigate, and 3=manage, and that it takes all three both to bring ILITs into compliance and to create new value that allows ILIT trustees to charge new assets-under-management (AUM) fees. Free download.

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Use this Who's Managing your ILITS... Anyone? Brochure as a leave-behind to help trustees talk with their clients about new professional management services for the TOLI holdings in their charge. Free download.

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Use these Sample Reports from "big-3" third-party administrators of TOLI holdings (TOLI TPAs) to demonstrate both that TOLI TPAs do not (generally) provide trustees with suitability determinations (even though some of their marketing material suggests they do), and thus how you can help provide ILIT trustees with independent TOLI product research to justify TOLI policy costs (as required by Section 7 of the Act) and set reasonable expectations as to the rate of return on trust assets (as also required by the Act).

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Use this "How well are your ILITS protected..." brochure to help ILIT trustees understand the differences between A) TOLI TPA services supporting their duty to monitor and B) TOLI research supporting their duty to investigate. Free download.

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Use this "Have you ever been challenged..." brochure to help trustees understand how THEInsuranceAdvisor.COM research goes well beyond the use of hypothetical illustrations of future policy values and insurer financial strength ratings to determine/document suitability based on all 5 factors of suitability, namely: 1) financial strength and claims-paying ability, 2) pricing competitiveness, 3) pricing stability, 4) cash value liquidity, and 5) historical performance of invested assets underlying policy cash values. Free download.

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  Use the new TOLI management services announcement letter to show trustees how to introduce these new TOLI management services. This allows their clients to opt-in based on the value to the client. It is created by the prudent process to generate new assets-under-management (AUM) fees to the trustee.

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Use this sample Confidential Policy Evaluator (CPE) Research Report to show trustees how they can use THEInsuranceAdvisor.COM research to identify both the suitability of a given TOLI holding as it relates to peer-group products with an accepted and easy-to-understand star rating system and the specific strengths and weaknesses of that given TOLI holding the based on all 5 factors of suitability as to: 1) financial strength and claims-paying ability, 2) pricing competitiveness, 3) pricing stability, 4) cash value liquidity, and 5) historical performance of invested assets underlying policy cash values. Free download.

Click here for a CPE Research Report for an actual TOLI holding.
Use this sample Rates and Terms Sheet (instead of the insurer's illustrations of hypothetical policy values) to show how you can help trustees understand A) what they are being charged (as required under Section 7 of the Act), and B) what they are getting in the way of investment performance (also required under the Act) while also protecting your intellectual property (i.e., having identified the product offering the best-available rates and terms for a specific client situation) in the same way that stockbrokers may identify a great stock in which to invest but do not give away the name of that stock for free.

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Use this Engagement Letter to set forth the scope of comprehensive TOLI management services to be provided, the standard-of-care and warrantees for that work, the definition and ownership of intellectual property developed through the "prudent process", the compensation arrangement, and the nature of the working relationship between ILIT trustees and/or participating underwriters.

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Use this sample Grantor Consent Form to solicit cooperation from the Grantor to either...
  1. Consent to increasing gifts to the trust as needed such that premiums may also be increased to adequately fund expected TOLI expenses.
  2. Consent to decreasing TOLI benefits as needed to reduce expected TOLI expenses to be sustainable by current gifts/premiums and cash values.
  3. Consent to changing the asset allocation of invested assets underlying TOLI cash values to asset classes with historically higher rates of return, albeit with historically greater volatility/risk.
  4. Consent to supplying updated medical records needed to explore exchanges and/or trades of existing TOLI holdings in favor of alternatives offering lower cost of insurance charges (COIs), lower fixed administration expenses (FAEs), lower cash-value-based "wrap fees" (M&Es) and/or lower premium loads.
  5. Decline to participate in the above TOLI management process and accept the risks inherent in current TOLI holdings (thereby protecting the ILIT trustee against suitability hind-sight second-guessing).

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Use this Prudent Delegation Agreement between the ILIT Trustee and the life insurance sub-advisor to define the roles, responsibilities and assets-under-management fee-split for each. Document coming soon.
Suggested Guidelines for Soliciting Life Insurance Rates & Terms from Multiple Sources such that A) client objectives are defined in advance (and thus all sources are providing information responsive to the request and not the "flavor of the day" life insurance product), B) the information provided is consistently presented (thus allowing for apples-to-apples analysis), and C) the steps of the process are coordinated for the benefit of the client (such that the actions of one respondent does not impair the ability of other respondents).

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