(914) 390-1965

Bob Ritter's blog #181 Image Endorsement Split Dollar with Optional Transfer

Throughout my Blog series, I ’ve written a lot about Loan Regime Split Dollar (See Blog #177 and 5144540057 for example).  I haven ’t addressed the several variations of employer-owned Endorsement Split Dollar that we also illustrate.  This Blog features one of them.  It involves an employer owning a life insurance policy in certain pre-retirement years during which the covered executive names personal beneficiaries for a large percentage of the death benefit.  The employer, who owns all cash values, has the option to transfer the policy to the covered executive at any time, and this case study will illustrate that transfer occurring at the beginning of year 11.

The 2003 split dollar regulations eliminated the use of this arrangement, and we have replaced it with Endorsement Split Dollar with Optional Transfer.  It works particularly well for business owners.

You can read the rest here: 8028491293 . . .


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781-753-4324

Bob Ritter's blog #180 Image A New Look at Various Financial Alternatives (It Will Knock Your Socks Off)

One of the reasons VFA became so popular is that it smoothly introduces cash value life insurance as a superb financial instrument.  With it, you can take on equity accounts, annuities, tax-exempt bond funds, IRAs, and just about any economic alternative a critic could come up with – and “knock the socks off” a prospective client with the comparative results.

Prospective clients make quicker, easier and, frankly, better decisions when comparative logic is used.  It frees you from trying to convince your prospects – in a vacuum – that purchasing life insurance is a good decision.  “Compared to what?” has favorably changed the public perception of life insurance – and of life insurance producers.  At InsMark, we take some credit for helping make this happen.

Now I want to knock your socks off with some new VFA capacity that will further enhance your prospect’s view of cash value life insurance.  What I am about to show you is not only applicable to a straightforward retirement sale but to the most complex concepts like split dollar, COLI executive benefit plans, premium financing, etc.  Because no matter what you present, letting VFA test the quality of the “eggs in the omelet” radically improves the perception of your overall presentation.

You can read the rest here: Blog #180 . . .


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Blog #179 - Helping Millennials with Financial Decisions

helping Millennials with financial decisions

As I was writing Blog #179, it reminded me of Bill Boersma’s comment in his article in the December 2014 issue of Trusts & Estates in which he discusses life insurance as an asset class: “I can only wonder if another asset with the same qualities would be implemented more frequently if it wasn’t called life insurance.”

From the research I’ve been doing on Twitter, Facebook, and Instagram, Millennials, in particular, are not getting much of a message about the value of 21st century, cash value life insurance.  Blog #179 is my attempt to equip upscale Millennials with sufficient information to identify a financial adviser skilled in the living uses of modern-day life insurance, especially indexed universal life.  It is a remarkable product in my estimation.

I also hope my readers will encourage the Millennials they know to read Blog #179 to learn the unique features of indexed universal life.

You can read the rest here: Blog #179 . . .


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Blog #178: Coordinating Exceptional Split Dollar™
with Wealthy and Wise® (Part 2 of 2)

Bob Ritter's Blog #177 coaching and InsMark's Exceptional Split-Dollar image

Exceptional Split Dollar provides senior executives with a way to transform loans from an employer into substantial, tax free, retirement cash flow while producing a credit to earnings for the employer in all years.

The coordination of Exceptional Split Dollar with Wealthy and Wise produces compelling retirement results.  While any well-designed split dollar illustration can generate an interesting presentation, it is inadequate as a stand-alone retirement piece.  The results can be effectively presented only by coordinating it with an overall retirement analysis.

You can read the rest here: thick-fingered . . .


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Blog #177: Exceptional Split Dollar™ (Part 1 of 2)
New Premises and Conditions

(Including a “Jim Harbaugh” Variation)

Bob Ritter's Blog #177 coaching and InsMark's Exceptional Split-Dollar image

Blog #177 introduces you to Exceptional Split Dollar, our new strategy for providing tax free retirement cash flow for favored executives (including Jim Harbaugh-type coaches).  It fully complies with the Final Split Dollar Regulations issued in September 2003 (68 FR 54336) by the U.S. Treasury Department.

Exceptional Split Dollar provides favored key executives with a way to transform loans from an employer into substantial, tax free, retirement cash flow while producing a credit to earnings for the employer in all years.  Illustrated using new features in the InsMark Loan-Based Split Dollar System, it requires no payments or taxes from the insured executives.

Exceptional Split Dollar produces more favorable results than the equity split dollar and reverse split dollar strategies of the 1970s, 1980s, and 1990s, the designs of which were always somewhat speculative due to the lack of specific tax law and regulation for the favorite variations.

You can read the rest here: Blog #177 . . .


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(713) 827-5476

Bob Ritter's Blog #176 wealthy-retired-couple-sitting-on-the-beach image

The higher the client’s income tax bracket, the more intense the objection to converting an IRA to a Roth IRA.  Blog #176 addresses this issue for a client in a 49.3% bracket (federal and state) with $2,000,000 in an IRA.  The tax turns out to be a superb investment – a term not generally associated with taxes.

We then ramped the analysis up to evaluate an increase to a 75% bracket created by eager politicians should the Democrats gain control of the House, Senate, and Presidency.  With this scenario, the Roth becomes irresistible.

You can read the rest here: Blog #176 . . .


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262-814-4153

Bob Ritter's Blog #175 wealthy-retired-couple-sitting-on-the-beach image

The decision to convert an IRA to a Roth IRA is often waylaid by the client’s negative view of the income tax issues resulting from the conversion.  Let’s examine this concern because the income tax generated usually turns out to be a good investment.

The case study in this Blog involves a ten-year conversion of $600,000 in IRA funds to a Roth IRA with the goal of enhancing the retirement results for Robert and Ann Baxter.  Both are currently age 60 and planning to retire at age 70.  The results are significant as they can meet their annual, spendable, cash flow goal of $150,000 — indexed at 3.00% — while also providing an increase of $1,915,723 in their long-range net worth.  See below for a graphic of the results.

You can read the rest here: Blog #175 . . .


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956-342-7399

Bob Ritter's blog 174 excutive dual security plan image

Welcome to InsMark’s newest innovation, the Dual Security Plan (DSP).  This unique buy-sell / retirement benefit plan only works for members and partners of Limited Liability Companies, Limited Liability Partnerships, and Partnerships.

What a plan for members and partners!

You can read the rest here: Blog #174 . . .


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(570) 374-2402

Bob Ritter's blog 171 accelerated arbitrage image

We believe that the Tax Cuts and Jobs Act (“Tax Reform”) has made the purchase of cash value, life insurance even more attractive in the retirement planning sector.  Blog 173 will provide you with significant proof of this.

Estate Planning

We believe that the Tax Cuts and Jobs Act (“Tax Reform”) has made the purchase of cash value, life insurance even more attractive in the retirement planning sector.

At first glance, it may seem that Tax Reform has damaged the estate planning market for cash value, life insurance sales where customers may feel:

  • They don’t need to purchase trust-owned life insurance; or
  • They no longer need their existing trust-owned life insurance and can surrender those policies.

We believe both conclusions are false in the vast majority of client circumstances.  These thoughts are developed further in Blog #173 along with several sample reports and illustrations proving the continuing value of life insurance as a planning device for both retirement and estate planning.

You can read the rest here: Blog #173 . . .


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Blog #172: Arbitrage vs. Accelerated Arbitrage™ (Part 2 of 2)

Bob Ritter's blog 171 accelerated arbitrage image

In Part 2, we examine “Compared to What” by integrating the IUL and premium financing illustration data from Blog #171 (Part 1) into our Wealthy and Wise® planning system to gauge the impact on cash flow, net worth, and wealth to heirs compared to the client’s current plan.

The results of the arbitrage of the indexed universal life (“IUL”) and the accelerated arbitrage™ of the IUL-funded premium financing are powerful when viewed in the context of an overall wealth analysis.  The IUL added to their current plan more than doubles net worth, and premium financing triples it – all with no additional ou-of-pocket cost to the clients as asset allocation is used for premiums and participating policy loans are used to repay the bank loan (including accrued loan interest).

You can read the rest here: 704-527-9169 . . .


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Bob Ritter's blog 171 accelerated arbitrage image

Interest rate arbitrage occurs with Indexed Universal Life (“IUL”) when:

  • The loan interest rate is fixed (typically 4% to 5%);
  • There are outstanding policy loans and the selected index yields more than the loan interest rate;
  • The cash values securing the loan balances are credited with the yield produced by the selected index as if there were no loans.

Interest rate arbitrage with IUL is a powerful force when coupled with max-funded policies with serious participating loans scheduled for retirement years.

As you will see, there is a way to accelerate the arbitrage further by coupling it with higher premiums and greater policy loans where the policy owner funds the increase in premiums from another source.

You can read the rest here: 620-527-3961 . . .


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(541) 272-5267

Bob Ritter's blog 170 The Key to More Retirement Cash Flow image

We often illustrate policy loans with Indexed Universal Life (“IUL”) and thought you might like to see a specific mathematical comparison between fixed and participating loans.  The key to the latter is the significant increase in values provided by loans secured by cash values that continue to earn the indexed interest that is credited to the policy.  Fixed loans don’t include this feature.

To do this, we used the new InsMark Compare module that is available on the Personal Insurance tab in the InsMark Illustration System.

You can read the rest here: 484-390-0488 . . .


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Bob Ritter's blog 168 image 1 The Hidden Partner devil (the Internal Revenue Service) image

Blog #169 (Part 2 of 2) follows up on its Part 1 predecessor where the income tax strategies outlined in Part 1 are put into practice in an actual, retirement planning case study.  The short-, mid-, and long-range net worth and retirement cash flow for a pair of top-tax-bracket married doctors are compared using Indexed Survivor UL vs. their various liquid assets (including their retirement plans).  Some of those same liquid assets are alternatively converted to an income stream that funds the Indexed Survivor UL bearing annual premiums of $134,892.

Long-range, Strategy 1b has over $11 million more in net worth and over $3 million more in spendable, retirement cah flow.  The additional net worth could easily accommodate a significant increase in spendable, retirement cash flow or, perhaps, a serious, gifting program for children or favorite charities.

Blog #169 further compares the results in various higher and lower tax brackets in order to demonstrate the variable outcomes of the asset based plans vs. the life insurance based plan.  None of the alternatives stands a remote chance of competing with the life insurance.

You can read the rest here: Blog #169 . . .


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