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Proactive Management of Insurance Assets

Thursday, November 17, 2011

There is no segment of the financial services industry where so many owners and their advisors know so little about A) what they are being charged or B) what they are earning. In fact, findings from three data sets:

1)a Tillinghast Towers Perrin study6;

2) a third-party administrator (TPA) survey of trust-owned life insurance (TOLI) policy holdings7; and

3) research from TheInsuranceAdvisor.COM database,

all indicate the disparity between best-available rates and terms and poorly-priced products is as much as 40%. In other words, because so few know what they/their clients are actually being charged, some clients are being overcharged by as much as 40%.

Given the unique utility of life insurance for financing estate taxes, or for setting up an endowment for preservation and maintenance of family assets, or as a hedge against risks inherent in certain investments, or to balance an estate between family members, all signs point toward substantial growth in both the demand for and the supply of life insurance portfolio management services. While life insurance agents/brokers have been heard to say “life insurance cannot be purchased, it must be sold”, this too seems to be changing.

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