In selling life insurance, some degree of negotiation of commission between sales person and consumer takes place in the form mixing permanent with term insurance in one policy, the term coverage carrying no commission to the agent, allowing the agent to trade off compensation in favor of enhanced cash value performance. Looking only at cash-on-cash return-premium contributions versus cash surrender value-this article finds that this form of commission negotiation does enhance client value in life insurance to varying degrees, but not in a predictable, consistent or statistically significant fashion.
IRS Technical Advice Memorandum 9604001 extends its earlier analysis of the taxation of split-dollar life insurance arrangements by finding that cash surrender value increases in excess of amounts payable to the employer are currently taxable to the employee. In Revenue Ruling 64-328, the IRS identified that premium payments were taxable compensation to the extent they were made by the employer. In the 1996 ruling, the IRS found increases in cash surrender value to be property under IRC section 83.
DEBTOR/CREDITOR INSURANCE: The trial court erred by granting a writ of execution against the cash value of a debtors whole-life insurance policies in contravention of R.C. 3911.10: although the insured had paid the premiums on his life-insurance policies in fraud of his creditors, the insurance policies had not matured, and there were no proceeds to garnish. Under R.C. 3911.10, life-insurance proceeds are exempt from creditors claims except for the amount of any premiums the insured paid in fraud of his creditors. A whole-life insurance policy does not have any proceeds until the policy matures, which occurs when an insured dies or voluntarily accepts the cash surrender value of the policy. See Deal v. Menke (C.P.1939), 14 O.O. 414; see also, Doethlaff v. Penn Mut. Life Ins. Co...
[...] known as permanent or cash value life, whole life has higher premiums but when used as a retirement investment offers tax-deferred money growth by delaying income and capital gains. "Participating whole life is a life insurance contract that offers a guaranteed premium, death benefit and cash surrender value," Allen says.
Life settlements are quickly becoming the guilty pleasure of the life insurance industry, as a handful of companies scramble for a piece of the market's estimated $15 billion in annual business. A life settlement is a transaction in which a third-party investor buys an existing life insurance policy from the owner, who is usually also the insured, for less than the face amount but more than the cash surrender value. No matter what the annual market's size, it looks like the life settlement business is here to stay, and life insurers want a piece of it. There's a lot of potential volume in the life settlement market. An estimated $10 trillion worth of life insurance is in force nationwide, so if just half were held by individuals, and just 20% of that half by seniors, it represents $1 tr...
In the past, the only cash-out option available to corporations for prematurely departing executives (those not retiring) was to allow their key-person life insurance or split-dollar life insurance policy to lapse and collect the cash surrender value, less the lapse forfeiture that is often part of the contract. The amount paid to the policy owner depends on many factors, including the insured's age (most life settlement companies require that the insured be over 65) and health, the cost of the ongoing premiums to keep the policy in force, the policy's cash surrender value, the policy's face amount, and the existence of any loans against the cash surrender value.
R G Barry Corp's (Barry), aka The Dearfoams Co, principal business is the design, manufacturing and marketing of "at-home" and "around-the-home" comfort footwear, principally slippers. Under the company chairman's management, annual revenues peaked in the mind-1990s at $150 million, with earnings of about 10% of sales. In 1999, however, the wheels started coming off what had been a very healthy, cash-rich company. From the inception of the company, Barry's primary lender was a mid-size regional bank, (the Bank), also headquartered in Columbus, OH. With the restructuring plan in hand, and using $2 million from the cash surrender value of an insurance policy as a lever, the president of the turnaround company was able to negotiate a four-week extension with the Bank. Now that the turnarou...
During pendency of dispute over whether life insurance policy was part of liquidation estate, trial court did not err in finding appellant in contempt where appellant knew superintendent of Ohio Department of Insurance was claiming an interest, but nevertheless obtained the cash surrender value of the policy for his own use.
Beaver-based Greek Catholic Union -- the state's largest fraternal-benefit society -- has placed $12 million in liens on members' policies in an unusual bid to shore up a capital base wracked by financial markets. The balance-sheet maneuver equals an average $300 off the cash- surrender value, or 2 percent, of each member's life insurance or annuity contract. The society explained the liens in letters sent to its roughly 40,000 members within the last month.
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