At TRG, we take life insurance to an entirely different level. We know that life insurance is not an off-the-shelf product; it is a chassis that, with the right design, can achieve a myriad of customizable objectives. Our research and design team builds life insurance solutions based on our clients’ unique circumstances. Our independent platform allows us to select the most appropriate carriers to achieve specific goals for our clients. The end result is a policy designed specifically for you, with a team in place to make changes to the policy as your objectives or market conditions change.
Insurance Portfolio Counseling
The first step is identifying the right insurance. While most life insurance agents stop there, our dedicated service and analysis teams at TRG regularly review our clients’ portfolios from both a structural and economic perspective. Often, there are desirable funding and design changes to be made to existing policies. Like the stock and bond markets, the life insurance market is constantly changing and providing new opportunities for our clients’ existing insurance. Through our efforts, our clients can take advantage of the certainty and leverage that life insurance adds to their overall portfolio.
Private Placement Life Insurance (PPLI)
PPLI has become increasingly popular as high net worth investors seek greater tax efficiency with investment vehicles. Typically, hedge funds and alternative asset class investments are taxed as ordinary income or short-term capital gains, at federal rates as high as 43.3%. Add in state taxes and the combined rate approaches 50%. By holding these assets within an insurance wrapper, investors can defer and potentially eliminate the tax burden.
Additional Benefits of PPLI:
PPLI typically offers lower costs and commissions in comparison to retail insurance products
Simplified tax reporting – PPLI eliminates K-1s and many other annual reporting burdens associated with hedge funds
No surrender charges – These policies can be surrendered at any time without incurring surrender charges that are typically associated with retail life insurance policies
Avoidance of phantom income – Investors will avoid paying taxes on income that’s not distributed to them because they accumulate in a tax-free environment
Enhanced creditor protection
Premium financing is a strategy that can deliver a powerful, flexible and efficient option for permanent life insurance premium payments with eligible high-net-worth clients. Premium financing can be a cost-effective, tax-advantaged strategy to help transfer your estate to future generations. It can help you obtain life insurance and use leverage to finance and enhance returns on the contract. These plans are typically a fair market loan arrangement between a commercial lender and an irrevocable life insurance trust (ILIT) where the lender loans the premiums for a life insurance policy on the client’s life to the ILIT. The gift to the ILIT is equal to the amount of loan interest charged – not the entire policy premiums. Thus, clients are able to acquire the death benefit needed with little or no gift tax impact.
Tax-Advantaged Investment Vehicles
High net worth investors are faced with unique challenges that require unique solutions. Higher tax rates continue to chip away at investment returns, and today’s bond yields leave conservative investors with few options. At TRG, we use our in-depth product and market knowledge to design life insurance policies which can often provide higher returns than your bond portfolio with the added benefit of the tax advantages of life insurance. Those tax advantages including potential tax-free growth and tax-free withdrawals, many compare the benefits to that of a Roth IRA.