THE TOOLS AND TECHNIQUES OF LIFE
INSURANCE PLANNING
4th Edition
Course Synopsis
Overall, this course addresses the technical aspects of various types of life insurance policies and annuities. To start, Part I of the course outlines the various techniques used by an agent or financial planner to evaluate an existing life insurance plan or to formulate a new plan. The first six introductory chapters on life insurance include an introduction to life insurance, how to estimate the insurance need, how to determine the right company, how to determine the right policy, legal aspects of life insurance and special policy provisions and riders.
The next twelve chapters focus on substantive discussions of various life insurance products. Adjustable life, current-assumption whole life, group life, joint life, limited-pay whole life, ordinary level-premium whole life, single premium life, survivorship life, term, universal life, variable life and variable universal life, as well as annuities and variable annuities, are covered. The course addresses each of these tools by describing what the tool is, when its use is indicated, what the advantages and disadvantages are, what the tax implications are, what alternatives are there for the use of this tool, what fees or other acquisition costs are involved, and how to select the best of its type.
The first seven chapters of Part II contain technical explanations of federal taxation affecting all the tools and techniques discussed previously. The estate, gift and generation skipping transfer taxation of life insurance, the treatment of modified endowment contracts and IRC Section 1035 exchanges, the income taxation of benefits, and the transfer for value rule are addressed in these chapters.
The next twelve chapters are devoted to various techniques using life insurance. The use of life insurance in buy-sell agreements, charitable planning, death benefit only plans, qualified and nonqualified plans, and IRC Section 162 plans, as well as the roles of revocable and irrevocable trusts with respect to life insurance planning, are some of the techniques examined. Key employee life insurance and split dollar life insurance are also addressed. Finally, pension maximization, accelerated death benefits, and viatical settlements are discussed. For each technique, the course outlines what the technique is, when it should be used, and the advantages and disadvantages of its use. Also discussed are the tax implications of the technique. Items of importance not covered in one of these categories are generally addressed in the Questions and Answers section at the end of the chapter.