Life Insurance Funding Analysis Exhibit

By Susan J. Bruno, CPA/PFS

John Q. Sample

 

 

Life Insurance Funding Analysis

 

 

March 2010

 

 

 

 

 

XYZ Life Insurance Co. Universal Life Policy

Current death benefit:

$3,000,000

 

Owner:

1998 ILIT

 

Policy date:

02/01/98

 

Policy number:

XX123

 

Policy loan amount

 None

 

Cash value as of  02/05/10:

$507,720

 

Cost basis:

$1,040,724

 

Policy current/minimum interest rate:

4.5%/4.5% *

  

 Estimated internal rate of return (IRR) if insured had died in 2009:

15.25%

 

 

 

 

Estimated level premiums (provided*):

 

 

  Current (to age 86)

$85,000

 

  To support policy to age 90

$113,000

 

  To support policy to age 95

$131,000

 

  *Per illustrations run July Sept. 09

 

 

Duration of policy with scheduled premiums

 Lapse on 6/1/19

 

Original estimated duration of policy

 Lapse on 12/1/20

 

Duration of policy with 0 future premiums

 Lapse on 2/1/14

 

* As-sold illustration assumes a 6.5% crediting rate.

 

 

 

 

John Q. Sample

 

 

Date of Birth

7/1/1932

 

Age as of March 2010

77

 

Life expectancies

 As of Jan. 2010 report

 

  Company A

 74 months, 6.2 years

 

  Company B

 79 123 months, 6.6 10.3 years

 

Note:  See full report from company

 

 

This exhibit accompanies the Personal Financial Planning column in the June 2014 issue of The Tax Adviser.

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