FILLING IN THE GAPS OF TRADITIONAL INSURANCE PLANNING
Edcora is focused on filling in the gaps that traditional insurance planning can often leave unaddressed. We are not in the business of reinventing the wheel, rather we seek to “remove the rocks and nails that get caught in the treads”. Along those lines we only seek to work with families where our services are value accretive.
​
​Income tax on a family’s investment portfolio is often the number one contributor to inter-generational wealth erosion. Its relative impact is even more pronounced if the family has already implemented basic estate tax strategies like irrevocable trusts and lifetime gifts.
In select situations the use of Private Placement Life Insurance (“PPLI”) can mitigate a meaningful part of this income tax burden. It accomplishes this by marrying the IRS treatment of life insurance with the ability to invest in alternative and traditional investments. The proper employment of PPLI can result in the following benefits:
Tax free growth
Flexible access to tax-free distributions (via withdrawals and/or loans)
No K1s associated with underlying investments
Creditor/asset protection available in some states
Policy values paid to the beneficiary income tax free at death
PPLI is distinct from most traditional life insurance products in the following ways
Institutionally pricing and transparent policy charges
Wide array of alternative investment options
Possibility of having a client’s existing advisor approved to manage the underlying investments
No surrender charges
Greater alignment of broker’s compensation with a client’s interests
Foundational Services
While PPLI can afford many advantages, it is generally unsuitable for solving a client’s complete liquidity needs at death. As such, it is critical to make sure PPLI is not being used as the primary source of liquid assets for estate tax payment, survivor needs, or business succession planning. To that end, Edcora works with clients to make sure these other needs have been addressed prior to determining if PPLI has a place in their overall insurance portfolios.
Representative Foundational Services and Solutions
Buy-Sell trust funding
Survivor income sources aggregation (inclusive of investment style drift)
Insurance stress test analysis
Estate Tax liquidity gap/surplus review
Company insurance audits
Non-Qualified Plan funding review
Qualified plan survivorship strategies