how to conduct a trust owned life insurance policy review · pdf file20.04.2017 ·...

Independent Life Insurance Experts

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How To Conduct a Trust Owned Life Insurance Policy Review

A Session Specifically Designed for ITM TwentyFirst University

Thursday, April 20, 2017 at 2PM ET

MICHAEL BROHAWN, CFP®, CLUChief Marketing OfficerITM TwentyFirstP: 319.553.6227W: itm-twentyfirst.comE: [email protected]

Presented By:

This course has been approved for 1 hour of Continuing Education for CTFA (Fiduciary) and CFP®

The Institute of Certified Bankers (ICB), a subsidiary of the American Bankers Association, is dedicated to promoting the highest standards of performance and ethics within the financial services industry. This statement should not be viewed as an endorsement of this program or its provider.

Aaron J. Hanson, CLU®

Remediation ManagerITM TwentyFirstD: 319.553.6260W: itm-twentyfirst.comE: [email protected]



Caregivers and Household Employees: Navigating the Complexities of Employment Law as a FiduciaryJosh Greenberg, CEO and Rachel Green, COO TEAM Risk Management StrategiesTuesday, May 16, 2017 at 2 PM ET3/4 Hour CE credit for CFP, CTFA and FIRMA Certified Member

When a fiduciary pays someone to provide services to his or her client, it is likely that an employment relationship is created. That means that there is not only an administrative duty to process payroll, accurately withhold and file taxes, and comply with wage and hour law, but also significant potential for liability against trust assets and the fiduciary as well. Employment liability, whether in the form of a Workers’ Compensation claim, a wrongful termination claim, a caregiver abuse claim, or any of the host of other potential claims, is one of the few liabilities which can pierce the veil of the trust. This is a not only a liability for trust assets, but if handled incorrectly could subject the fiduciary to penalties and sanctions. Join Josh Greenberg and Rachel Green, who will describe these risks as well as the compliant solutions for hiring, employing, and paying employees, as well as ways to avoid some of the common pitfalls and risks for fiduciaries, including proper classification of employees as W-2 employees versus 1099 independent contractors.

Effective Life Insurance Strategies (With or Without the Federal Estate Tax)Michael Amoia, JD, LLM (Tax), SVP, Advanced Sales and Life Product Management at Crump Life Insurance ServicesThursday, June 8, 2017 at 2 PM ET1 1/4 Hour CE credit for CFP, CTFA and FIRMA Certified Member

Many of your clients who in the past used life insurance to pay estate taxes may be questioning the use of life insurance strategies at this point. But the fact is, life insurance can be used for much more than

just tax planning and you can provide your clients with a great service by understanding how to use this asset to maximize wealth and leverage assets to the next generation. Join Michael Amoia, an advanced planning expert with 23 years’ experience who has helped high net worth individuals across the country understand how to effectively use life insurance to reach their planning goals. Michael will highlight key strategies that you can immediately bring to the table to help your clients, allowing you to turn the tax planning discussion to effective legacy planning. And after all, isn’t that what most clients are looking for?

Upcoming Webinars



Today’s Agenda• Why You Need To Conduct Policy Reviews

• How Often Should You To Conduct A Review

• What Goes Into A Good Policy Review

• What To Do When There Is An Issue

• How To Document The Trust File



Why Do You Need To Conduct An Annual Policy Review?Because You Are Required To As A TOLI Trustee§ 9.6 Review of fiduciary accounts.(c) Annual review. At least once during every calendar year, a bank shall conduct a review of all assets of each fiduciary account for which the bank has investment discretion to evaluate whether they are appropriate, individually and collectively, for the account.

Because Things Change… Slowly

4.00%

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Whole Life Dividend Drop Over The Last 30 Years

Because Things Change… Kind of Quickly

Drop in S&P 500 Over 17 Month Period

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Because Things Change… Very Quickly

Transamerica Cost Increase Causes Premium to Maturity to More Than Double: A Case Study for TrusteesPosted on September 9, 2015 by mbrohawnIn May, that level premium was $36,400. After the COI increase, the level annual premium more than doubled to $81,595

Our Reports Are Done On An Annual Basis Immediately After The Anniversary Date

2121 INSIGHT INSIGHT™

Base ReportBase Report

Life Insurance Policy Analysis & ReportingLife Insurance Policy Analysis & Reporting

Variable UniversalVariable Universal

Prepared For:Prepared For: InsuranceIQ Bank & Trust CompanyInsuranceIQ Bank & Trust Company

Policy Owner:Policy Owner: Samuel L. Jackson Irrevocable TrustSamuel L. Jackson Irrevocable Trust

Trustee Name:Trustee Name: InsuranceIQ Bank & Trust CompanyInsuranceIQ Bank & Trust Company

Policy Number:Policy Number: 9429806494298064

Client ID:Client ID: 03350335

Report Date:Report Date: 05-Jul-201605-Jul-2016

CONFIDENTIALCONFIDENTIAL

INSIGHT Base ReportPolicy: 94298064 | Client ID: 0335

Policy Owner: Samuel L. Jackson Irrevocable Trust

keeping trusts on track Page: 1 of 13

Reviews are completed once all information has been provided by the carrier and are typically posted within 60 days of the anniversary date.



Items That Need To Be Reviewed – All Policy Types

Grading

PremiumsCurrent Premium: $8,770.00

Premium Mode: Annual

Premium Duration: To Age 100

Next Premium Due: 28-Jun-2016

Last Cash Premium Paid Date: 16-Jun-2015

Last Cash Premium Paid Amount: $8,770.00

Total Premiums Paid: $173,250.12

Planned Premium Suspension: No

Insured InformationInsured Name: Elizabeth P Jackson

Risk Class: Standard NonSmoker

DOB: 01-Jan-1962

DOD:

Gender: Female

Issue Age: 44

Current Age: 54

Life Expectancy: 36.38

Carrier RatingsComdex: 92 (out of 100)

AM Best: A+ (2 of 17)

Standard & Poor's:

Moody's: A1 (5 of 22)

Weiss: B (5 of 17)

Fitch: AA- (4 of 22)

Sub AccountsAccount NameAccount Name AllocationAllocation

Core Bond 12.56%

International Equity Index B 17.34%

Mid Cap Index 6.66%

Small Cap Index 6.11%

Total Stock Market Index 57.33%




Policy NumberPolicy Number Net Death BenefitNet Death Benefit InsuredInsured CarrierCarrier

94298064 $1,300,000.00 Elizabeth P JacksonJohn Hancock Life Insurance

Company (USA)

Grading

Policy Grade

FBased on current annual premiums and life expectancy,

probability of coverage is 21.54 %.

← Superior to Poor →

A+ A A- B+ B C D F

Carrier Strength

ABased on combining various carrier rating services, the

Comdex ranking and the admitted assets of the carrier to

create a unique Carrier Grade within the IIQ system.

← Strong to Weak →

A+ A A- B+ B C D F

Policy DetailsIIQ #: 0335-00021

Policy Number: 94298064

Policy Type: Variable Universal

Plan Name: Accumulation VUL

Carrier:John Hancock Life Insurance

Company (USA)

Issue Date: 28-Jun-2006

Effective Date: 28-Jun-2006

Split Dollar: N/P

Modified Endowment Contract: No

Carrier Agent of Record

Beneficiary:Samuel L. Jackson Irrevocable

Trust

Policy Riders:

Assigned: N/P

Policy ValuesValues As Of: 27-Mar-2016

Death Benefit Option: Level

Base Death Benefit: $1,300,000.00

Term Rider: $0.00

Gross Death Benefit: $1,300,000.00

Net Death Benefit: $1,300,000.00

Gross Cash Value: $122,829.41

Surrender Charge: $0.00

Net Cash Value: $122,829.41

Loan Balance: $0.00

Accrued Interest: $0.00




The Policy Grade is based on the probability a policy will pay a death benefit, not necessarily the quality of the policy.

Carrier strength is a proprietary rating based on public information.

Provides an updated breakdown of ratings of financially responsible carrier.

Life ExpectancyBased on 2008 Commissioners Standard Ordinary Mortality Table and is for the general protected virtual at large. It does not take into

consideration the insured's family history, medical condition, lifestyle or other factors affecting the individual's life expectancy.

Elizabeth P Jackson

Insured's Age 54

Insured's Life Expectancy 36.38

Insured's Risk Class Standard NonSmoker

CurrentCurrent

AgeAge

Age atAge at

Median LEMedian LE

5454 9090 120120




This is a “generic” life expectancy. A personalized Life Expectancy (LE) Report is available from ITM TwentyFirst.

Life Expectancy

Carrier Ratings



Ratings Explanation

A.M. Best provides a financial and operating performance rating on virtually all life and health insurance companies.

Standard & Poor’s provides financial strength ratings for those insurers who request a rating. S&P also provides financial strength ratings from public information for other insurers.

Moody’s and Fitch provide ratings for those insurers who request a rating. Therefore, ratings from these two services are not available for all insurance companies.

The Comdex is a composite index based on the ratings received by a company from the ratings services. It is based on a scale of 100.

The Numerical Equivalence (listed as Rank below) is the number which is often shown in parentheses next to each rating indicating where that particular rating falls in the rating scale. For example, an S&P rating of “AA-” has a numerical equivalence of “(4)”, meaning “AA-” is S&P’s fourth highest rating.

Rank Am Best Standard & Poors Moody's Fitch

1 A++ AAA Aaa AAA2 A+ AA+ Aa1 AA+3 A AA Aa2 AA4 A- AA- Aa3 AA-5 B++ A+ A1 A+6 B+ A A2 A7 B A- A3 A-8 B- BBB+ Baa1 BBB+9 C++ BBB+ Baa2 BBB 10 C++ BBB- Baa3 BBB-11 C++ BB+ Ba1 BB+12 C- BB Ba2 BB13 D BB- Ba3 BB-14 E B+ B1 B+15 F B B2 B16 B- B3 B-17 CCC+ Caa1 CCC+18 CCC+ Caa2 CCC 19 CCC- Caa3 CCC-20 CC Ca CC21 C C

Note: Watch List identifiers follow the ratings if the company is on the rating service’s watch list. The identifier indicates a possible upgrade (w+), downgrade (w-), or unknown change (w).



A Note About Life Insurance Policy IllustrationsUnless a policy is guaranteed and the premium is paid exactly as shown in the policy illustration, the illustration, either “as sold” or “in force”, will be wrong. Life insurance illustrations are at best, a guide to show projected policy performance. Non-guaranteed items will change, often dramatically, which will affect policy performance. Cash value returns, shown in a straight line, level fashion, are unrealistic. It is important to understand their nuances and limitations.

Illustrated ValuesCurrent Illustration Date: 04-Jan-2017

Current Policy Year: 7

Assumed Interest Rate: 3.00%

Alternate Illustration Date 04-Jan-2017

Current Policy Year 7

Assumed Interest Rate 3.00%

Current Illustration Maturity/Alternate Illustration

PolicyPolicy

YearYearAgeAge

Out-of-Pocket Out-of-Pocket

PremiumPremium

AccountAccount

Value*Value*

DeathDeath

Benefit*Benefit*IRRIRR


PremiumPremium

AccountAccount

Value*Value*

DeathDeath


7 67 $0.00 $87,000.00 $1,000,000.00 1000% + $0.00 $87,000.00 $1,000,000.00 1000% +

8 68 $2,500.00 $88,000.00 $1,000,000.00 269.55 % $10,000.00 $95,000.00 $1,000,000.00 266.72 %

9 69 $2,500.00 $90,000.00 $1,000,000.00 135.43 % $10,000.00 $105,000.00 $1,000,000.00 132.32 %

10 70 $2,500.00 $85,000.00 $1,000,000.00 88.75 % $10,000.00 $110,000.00 $1,000,000.00 85.57 %

11 71 $0.00 $75,000.00 $1,000,000.00 65.64 % $0.00 $105,000.00 $1,000,000.00 62.78 %

12 72 $0.00 $65,000.00 $1,000,000.00 51.95 % $0.00 $100,000.00 $1,000,000.00 49.36 %

13 73 $0.00 $60,000.00 $1,000,000.00 42.94 % $0.00 $95,000.00 $1,000,000.00 40.58 %

14 74 $0.00 $55,000.00 $1,000,000.00 36.56 % $0.00 $90,000.00 $1,000,000.00 34.41 %

15 75 $0.00 $50,000.00 $1,000,000.00 31.82 % $0.00 $85,000.00 $1,000,000.00 29.84 %

16 76 $0.00 $40,000.00 $1,000,000.00 28.16 % $0.00 $80,000.00 $1,000,000.00 26.33 %

17 77 $0.00 $35,000.00 $1,000,000.00 25.25 % $0.00 $75,000.00 $1,000,000.00 23.55 %

18 78 $0.00 $30,000.00 $1,000,000.00 22.88 % $0.00 $70,000.00 $1,000,000.00 21.30 %

19 79 $0.00 $20,000.00 $1,000,000.00 20.92 % $0.00 $65,000.00 $1,000,000.00 19.43 %

20 80 $0.00 $10,000.00 $1,000,000.00 19.26 % $0.00 $60,000.00 $1,000,000.00 17.87 %

21 81 $0.00 $0.00 $0.00 $0.00 $55,000.00 $1,000,000.00 16.53 %

22 82 $0.00 $50,000.00 $1,000,000.00 15.38 %

23 83 $0.00 $45,000.00 $1,000,000.00 14.38 %

24 84 $0.00 $40,000.00 $1,000,000.00 13.50 %

25 85 $0.00 $35,000.00 $1,000,000.00 12.73 %

26 86 $0.00 $30,000.00 $1,000,000.00 12.03 %

* Non-guaranteed

Current Projected Values Projected Maturity Values Life Expectancy Projected Lapse

INSIGHT Base ReportPolicy: UL08082006 | Client ID: 0335

Policy Owner: David and Jackie Thompson Insurance Trust Dated 6/6/2006


Premium needed for policy to run to maturity under current assumptions.

The internal rate of return (IRR) measures the profitability or loss from this point forward based on future premiums paid measured against the death benefits of the policy. It does not include past premium payments.

Outcome assuming current premium under current assumptions.



Trust Relationships

Grantors

Trust NameTrust NameContactContact

InformationInformationDate of BirthDate of Birth Phone NumberPhone Number EmailEmail

Preferred MethodPreferred Method

of Communicationof Communication

David and Jackie

Thompson Insurance

Trust Dated 6/6/2006

Mr. David J. Thompson

123 Main St.

Cedar Falls IA 50613

14-Apr-1950 (66)

Beneficiaries





David and Jackie

Thompson Insurance


Mr. Billy T. Thompson

1212 Main St.

Chicago IL 41515

05-May-1995 (21)

Policy OwnerOwnerOwner %% Trust Account #Trust Account # Federal Tax IDFederal Tax ID

David and Jackie Thompson

Insurance Trust Dated 6/6/2006100.00% 06062006 060620060

Policy BeneficiaryBeneficiaryBeneficiary %%


Insurance Trust Dated 6/6/2006100.00%






Review DetailsCurrent ReviewCurrent Review Last ReviewLast Review ChangeChange

Variances 4 1

Maintenance Items 0 1

Action Items 1 5

Policy Grade F B

Carrier Grade F F

Current Premium $2,500.00 $1,500.00

Net Death Benefit $1,000,000.00 $1,000,000.00

Net Cash Value $81,251.00 $81,251.00

Projected Lapse Year Policy Year 21 35

VariancesFieldField Client ProvidedClient Provided Carrier ProvidedCarrier Provided Date of ResolutionDate of Resolution


Is Policy Currently Assigned N/P No

Policy Beneficiary Name


Insurance Trust Dated 6/6/2006

(100 %)

Jackie Thompson (100 %) 04-May-2015

Premium Mode Quarterly Annual

Split Dollar N/P No






Action and Maintenance Items

Action ItemsDescriptionDescription

Determine whether or not policy should be converted to a permanent plan of insurance and when conversion should be exercised.

Consider changing the premium mode to annual. Paying premiums more frequently may result in a larger out of pocket outlay than paying premiumsannually.

Maintenance ItemsDescriptionDescription

Policy was issued with a sub-standard rating. Contact insured(s) to verify whether his/her health (or the condition causing the rating) has improved and ifthere have been any other changes in health (applies to both insureds on survivorship plans). In addition, ask insured(s) as to if any form of tobacco productsis used. If the insured's health and/or lifestyle have improved with no other adverse changes and the use of tobacco products has not been started: (1) Contact insurance carrier as to requirements to apply for a rating reduction or removal. (2) If the carrier declines changing the rates, consider if the existingpolicy should be replaced with a new policy from another carrier. (NOTE: The decision to replace a policy should be made carefully. If the existing carrierdeclines a rating change, evaluate the reason for the declination as another carrier may also decline a new policy or issue a new policy with a sub-standardrating.) If replacement is to be considered, request at least three new insurance proposals for the purpose of a Section 1035 Exchange.

Policy was issued with smoker / tobacco rates. Contact insured(s) to verify whether tobacco is currently used in any form (applies to both insureds onsurvivorship plans). If tobacco products are no longer used, ask how long it has been since the insured(s) has been completely tobacco free and whetherhe/she has had any adverse changes in his/her health. If tobacco products are no longer used and the insured has experienced no adverse changes inhealth: (1) Contact insurance carrier as to requirements to apply for non-tobacco / non-smoker rates. (2) If the carrier declines changing the rates, considerif the existing policy should be replaced with a new policy from another carrier. (NOTE: The decision to replace a policy should be made carefully. If theexisting carrier declines a rating change, evaluate the reason for the declination as another carrier may also decline a new policy or issue a new policy with asub-standard rating.) If replacement is to be considered, request at least three new insurance proposals for the purpose of a Section 1035 Exchange.

Policy is less than two years old and remains subject to its suicide exclusion and incontestability provisions.


Policy Owner: Rick Knox Family Trust


Action and maintenance items should be reviewed for each report and dealt with accordingly.


338838383 $1,000,000.00 Rick Knox Lincoln Benefit Life Company

Grading

Policy Grade

A+Based on current annual premiums and life expectancy,



A+ A A- B+ B C D F

Carrier Strength

FBased on combining various carrier rating services, the




A+ A A- B+ B C D F



Policy Type: Term-20 Year

Plan Name: 20 Year Term

Carrier: Lincoln Benefit Life Company

Issue Date: 04-Apr-2014

Effective Date: 04-Apr-2014

Split Dollar: No


Level Term Duration: 20

Level Period Expires: 19.4

Is/Was Policy Convertible: Yes

To What Date or Age: 59

Beneficiary: Rick Knox Family Trust

Policy Riders:

Assigned: No

Policy ValuesValues As Of: 01-Nov-2014



Term Rider: $0.00




Policy Owner: Rick Knox Family Trust


After level term period premium rises.

Important to make grantor and insured aware of this option.

Term

Items That Need To Be Reviewed – Specific Policy Types



Whole Life


Current Out-of-Pocket Amount: $10,000.00


Remainder Paid By: Out of Pocket

Policy Is Paid Up: No

Next Premium Due Date: 19-Oct-2015

Last Premium Paid Date: 21-Oct-2015

Last Out-of-Pocket Amount: $10,000.00

Insured InformationInsured Name: Samuel L. Jackson

Risk Class: Non-Smoker

DOB: 21-Dec-1948

DOD:

Gender: Male

Issue Age: 66

Current Age: 66




Standard & Poor's: AA- (4 of 25)

Moody's: Aa3 (4 of 22)

Weiss: B (5 of 17)

Fitch: AA- (4 of 22)




Out of Pocket premium can be reduced by dividends.


6465465 $500,000.00 Samuel L. Jackson MetLife Insurance Company USA

Grading

Policy Grade

A+Based on current annual premiums and life expectancy,



A+ A A- B+ B C D F

Carrier Strength

A+Based on combining various carrier rating services, the




A+ A A- B+ B C D F



Policy Type: Whole Life

Plan Name: Presidential 100

Carrier: MetLife Insurance Company USA

Issue Date: 19-Oct-2015

Effective Date: 19-Oct-2015

Split Dollar: N/P



Trust

Policy Riders:

Assigned: N/P

Policy ValuesValues As Of: 19-Oct-2015

Base Death Benefit: $500,000.00

Term Rider: $0.00

Paid-Up Additions: $0.00

Gross Death Benefit: $500,000.00

Net Death Benefit: $500,000.00



Loan Balance: $0.00


Annual Dividend: $0.00

Participating Policy: Yes

Dividend Election: Paid Up Additions




Participating policies pay dividends.

The Term Rider and Paid-Up Additions provide additional death benefit to the base death benefit provided.

Review dividend election. Is this optimal election for policy goals?

Current Policy ProjectionCurrent Policy Year: 1

Current Premium: $10,000.00

Illustration Date: 19-Oct-2015

Projected Net Cash Value at Maturity: $500,000.00

MaturityMaturity Age 100

Policy Is Projected to Lapse: No

Out of Pocket Premiums Need to Resume: No

Out of Pocket Premiums Need to Increase No

Coverage After Maturity: No

Policy to Endow Fully at Maturity: Yes

Policy Loan at Maturity: No

Policy Projected to Reach LE: Yes




By design WL policies endow at maturity (cash value = death benefit). Review policy to ensure it is on track.



Current Assumption Universal Life (CAUL)



Premium Duration: Through Year 40

Next Premium Due: 15-Jan-2015

Last Cash Premium Paid Date: 05-Jan-2017



Planned Premium Suspension: Yes - Policy Year 10

Insured InformationInsured Name: David J. Thompson

Risk Class: Preferred

DOB: 14-Apr-1950

DOD:

Gender: Male

Issue Age: 60

Current Age: 66


Carrier RatingsFinancially Responsible Carrier: Lincoln Benefit

Comdex: 56 (out of 100)

AM Best: A- (4 of 17)

Standard & Poor's: BBB+ (8 of 25)

Moody's:

Weiss: C+ (7 of 17)

Fitch:

Current Policy ProjectionCurrent Premium: $2,500.00


Illustration Date: 04-Jan-2017

Lapse Year Based on Non-Guaranteed Assumptions: Policy Year 21

Lapse Year Based on Guaranteed Costs & Charges:

Continuation of Coverage to LE No

Continuation of Coverage to Age 100 No

Continuation of Coverage to Maturity No




Policy Year 10

This is the premiumactually paid, not necessarily the scheduled premium. You should confirm with expectations.

Provides an updatedbreakdown of ratings of financially responsible carrier.

Represent high potential liability for the trustee.

Premiums scheduled to cease based on prior information.

This should bereviewed annuallyfor changes.

Lapse year based on current premium and current and guaranteed assumptions and is one of the most importantpieces of information.

MaturityAssumed Interest Rate 3.00%

Maturity Age: 100

Coverage After Maturity: Yes - Full Death Benefit

Minimum Annual Premium to Maturity $10,000.00

As of: 04-Jan-2017

Premium Duration Through Year 10

Premium to Fully Endow at Maturity N/A

No-Lapse GuaranteeIssued with NLG: No

Interest Crediting RatesCurrent Rate 3.00%

Guaranteed Rate 3.00%




Important informationas not all CAUL policiespay the full deathbenefit at maturity.

Some Current Assumption products will be issued with a guarantee for a specified number of years, though not lifetime.Note that the

current rate is also the guaranteed rate.



Guaranteed Universal Life (GUL)



Premium Duration: To Age 100

Next Premium Due: 13-Nov-2015

Last Cash Premium Paid Date: 21-Oct-2015


Total Premiums Paid:

Planned Premium Suspension: No

Insured InformationInsured Name: Samuel L. Jackson

Risk Class: Non-Smoker

DOB: 21-Dec-1948

DOD:

Gender: Male

Issue Age: 65

Current Age: 67




Standard & Poor's: AA- (4 of 25)

Moody's: A1 (5 of 22)

Weiss: B (5 of 17)

Fitch: A+ (5 of 22)



Illustration Date: 01-Nov-2014

Lapse Year Based on Non-Guaranteed Assumptions: Not Projected to Lapse

Lapse Year Based on Guaranteed Costs & Charges: Lifetime

Continuation of Coverage to LE Yes

Continuation of Coverage to Age 100 Yes

Continuation of Coverage to Maturity Yes




$100,000

This should be reviewed annually for changes.

Outcomes based on premium being paid as outlined.

MaturityAssumed Interest Rate 2%

Maturity Age: 120


Minimum Annual Premium to Maturity $50,000As of: 01-Nov-2014

Premium Duration


As of:

Premium Duration

No-Lapse GuaranteeIssued with NLG: Yes

Is the NLG In Effect: Yes

Interest Crediting RatesCurrent Rate 2%

Guaranteed Rate 2%




Policy Year 35

Important to review current status of death benefit guarantee.

Policy does not need to endow since full death benefit is paid at maturity.

Current Policy ProjectionCurrent Policy Year: 10

Current Premium: $8,770.00

Illustration Date: 23-Jul-2015

MaturityAssumed Net Rate of Return 5.5% 7.5%

Assumed Gross Rate of Return 6% 8.0%

Maturity Age: 100 100

Coverage After Maturity: Yes - Full Death Benefit Yes - Full Death Benefit

Minimum Annual Premium to Maturity $17,292.00 $10,554.00

As of: 23-Jul-2015 23-Jul-2015

Premium Duration To Age 100 To Age 100

Premium to Fully Endow at Maturity N/A N/A

As of:

Premium Duration

No-Lapse Guarantee (NLG)Issued with NLG: Yes

Is the NLG In Effect: Yes

NLG Duration Based on Current Premium:




Two illustrations showing outcomes at two different investment returns are run.

Variable Universal Life (VUL)


94298064 $1,300,000.00 Elizabeth P JacksonJohn Hancock Life Insurance

Company (USA)

Grading

Policy Grade




A+ A A- B+ B C D F

Carrier Strength

ABased on combining various carrier rating services, the




A+ A A- B+ B C D F



Policy Type: Variable Universal

Plan Name: Accumulation VUL

Carrier:John Hancock Life Insurance

Company (USA)

Issue Date: 28-Jun-2006

Effective Date: 28-Jun-2006

Split Dollar: N/P




Trust

Policy Riders:

Assigned: N/P

Policy ValuesValues As Of: 27-Mar-2016



Term Rider: $0.00




Surrender Charge: $0.00


Loan Balance: $0.00





A level death benefit provides the death benefit only. An increasing death benefit provides the death benefit plus the cash value, or the premium paid.

Premium to endow not needed since full death benefit is paid.

Some VUL policies also have a death benefit guarantee.



Sample Base CAUL Report


itm-twentyfirst.com

Sample CAUL Insight Report


itm-twentyfirst.com

INSIGHTINSIGHT™

Base ReportBase Report

Life Insurance Policy Analysis & ReportingLife Insurance Policy Analysis & Reporting

UniversalUniversal

Prepared For:Prepared For: InsuranceIQ Bank & Trust CompanyInsuranceIQ Bank & Trust Company

Policy Owner:Policy Owner: David and Jackie Thompson Insurance Trust Dated 6/6/2006David and Jackie Thompson Insurance Trust Dated 6/6/2006

Trustee Name:Trustee Name: InsuranceIQ Bank & Trust CompanyInsuranceIQ Bank & Trust Company

Policy Number:Policy Number: UL08082006UL08082006

Client ID:Client ID: 03350335

Report Date:Report Date: 23-Mar-201723-Mar-2017

CONFIDENTIALCONFIDENTIAL




Reviews are completed once all information has been provided by the carrier and are typically posted within 60 days of the anniversary date.


itm-twentyfirst.com


UL08082006 $1,000,000.00 David J. Thompson Lincoln Benefit Life Company

Grading

Policy Grade




A+ A A- B+ B C D F

Carrier Strength

FBased on�combining various carrier rating services, the




A+ A A- B+ B C D F


Policy Number: UL08082006

Policy Type: Universal

Plan Name: Legacy Secure

Carrier: Lincoln Benefit Life Company

Issue Date: 15-Apr-2010

Effective Date: 15-Apr-2010

Split Dollar: No


Carrier Agent of Record Tom Jones - (800) 555-5555

Beneficiary:David and Jackie Thompson


Policy Riders: Accelerated Benefits Rider

Assigned: No

Policy ValuesValues As Of: 15-Apr-2016



Term Rider: $0.00




Surrender Charge: $9,000.00

Other Adjustments: $0.00


Loan Balance: $0.00





The Policy Grade is based on the probability a policy will pay a death benefit, not necessarily the quality of the policy.

Carrier strength is a proprietary rating based on public information.


itm-twentyfirst.com



Premium Duration: Through Year 40

Next Premium Due: 15-Jan-2015

Last Cash Premium Paid Date: 05-Jan-2017



Planned Premium Suspension: Yes - Policy Year 10

Insured InformationInsured Name: David J. Thompson

Risk Class: Preferred

DOB: 14-Apr-1950

DOD:

Gender: Male

Issue Age: 60

Current Age: 66


Carrier RatingsFinancially Responsible Carrier: Lincoln Benefit

Comdex: 56 (out of 100)

AM Best: A- (4 of 17)

Standard & Poor's: BBB+ (8 of 25)

Moody's:

Weiss: C+ (7 of 17)

Fitch:



Illustration Date: 04-Jan-2017

Lapse Year Based on Non-Guaranteed Assumptions: Policy Year 21

Lapse Year Based on Guaranteed Costs & Charges:

Continuation of Coverage to LE No

Continuation of Coverage to Age 100 No

Continuation of Coverage to Maturity No




Policy Year 10

This is the premiumactually paid, notnecessarily thescheduled premium.You should confirm withexpectations.

Provides an updatedbreakdown of ratings offinancially responsiblecarrier.

Represent high potential liability for the trustee.

Premiums scheduled to cease based on prior information.

This should bereviewed annuallyfor changes.

Lapse year based on current premium and current and guaranteed assumptions and is one of the most importantpieces if information.


itm-twentyfirst.com

MaturityAssumed Interest Rate 3.00%

Maturity Age: 100


Minimum Annual Premium to Maturity $10,000.00

As of: 04-Jan-2017

Premium Duration Through Year 10


No-Lapse GuaranteeIssued with NLG: No

Interest Crediting RatesCurrent Rate 3.00%

Guaranteed Rate 3.00%




Some Current Assumptionproducts will be issuedwith a guarantee fora specified number ofyears, though not lifetime.

Note that the currentrate is also theguaranteed rate.

Important informationas not all CAUL policiespay the full deathbenefit at maturity.


itm-twentyfirst.com

Life ExpectancyBased on 2008 Valuation Basic Tables and is for the general public at large. It does not take into consideration the insured's family history, medical

condition, lifestyle or other factors affecting the individual's life expectancy. For a personalized life expectancy report, please contact your advisor

for more information.

David J. Thompson

Insured's Age 66

Insured's Life Expectancy 22.48

Insured's Risk Class Preferred Non-Smoker

CurrentCurrent

AgeAge

Age atAge at

Median LEMedian LE

6666 8888 120120




Generic life expectancybased on age, sex andsmoker status.

This is a “generic”life expectancy. Apersonalized LifeExpectancy (LE) Reportis available from ITMTwentyFirst.


itm-twentyfirst.com

Illustrated ValuesCurrent Illustration Date: 04-Jan-2017







PolicyPolicy

YearYearAgeAge


PremiumPremium

AccountAccount

Value*Value*

DeathDeath



PremiumPremium

AccountAccount

Value*Value*

DeathDeath


7 67 $0.00 $87,000.00 $1,000,000.00 1000% + $0.00 $87,000.00 $1,000,000.00 1000% +

8 68 $2,500.00 $88,000.00 $1,000,000.00 269.55 % $10,000.00 $95,000.00 $1,000,000.00 266.72 %

9 69 $2,500.00 $90,000.00 $1,000,000.00 135.43 % $10,000.00 $105,000.00 $1,000,000.00 132.32 %

10 70 $2,500.00 $85,000.00 $1,000,000.00 88.75 % $10,000.00 $110,000.00 $1,000,000.00 85.57 %

11 71 $0.00 $75,000.00 $1,000,000.00 65.64 % $0.00 $105,000.00 $1,000,000.00 62.78 %

12 72 $0.00 $65,000.00 $1,000,000.00 51.95 % $0.00 $100,000.00 $1,000,000.00 49.36 %

13 73 $0.00 $60,000.00 $1,000,000.00 42.94 % $0.00 $95,000.00 $1,000,000.00 40.58 %

14 74 $0.00 $55,000.00 $1,000,000.00 36.56 % $0.00 $90,000.00 $1,000,000.00 34.41 %

15 75 $0.00 $50,000.00 $1,000,000.00 31.82 % $0.00 $85,000.00 $1,000,000.00 29.84 %

16 76 $0.00 $40,000.00 $1,000,000.00 28.16 % $0.00 $80,000.00 $1,000,000.00 26.33 %

17 77 $0.00 $35,000.00 $1,000,000.00 25.25 % $0.00 $75,000.00 $1,000,000.00 23.55 %

18 78 $0.00 $30,000.00 $1,000,000.00 22.88 % $0.00 $70,000.00 $1,000,000.00 21.30 %

19 79 $0.00 $20,000.00 $1,000,000.00 20.92 % $0.00 $65,000.00 $1,000,000.00 19.43 %

20 80 $0.00 $10,000.00 $1,000,000.00 19.26 % $0.00 $60,000.00 $1,000,000.00 17.87 %

21 81 $0.00 $0.00 $0.00 $0.00 $55,000.00 $1,000,000.00 16.53 %

22 82 $0.00 $50,000.00 $1,000,000.00 15.38 %

23 83 $0.00 $45,000.00 $1,000,000.00 14.38 %

24 84 $0.00 $40,000.00 $1,000,000.00 13.50 %

25 85 $0.00 $35,000.00 $1,000,000.00 12.73 %

26 86 $0.00 $30,000.00 $1,000,000.00 12.03 %

* Non-guaranteed





Outcome assuming current premium under current assumptions.

Premium needed for policy to run to maturity under current assumptions.

The internal rate of return (IRR) measures the profitability or loss from this point forward based on future premiums paid measured against the death benefits of the policy. It does not include past premium payments.


itm-twentyfirst.com

Illustrated Values Continued

Current Illustration Date: 04-Jan-2017







PolicyPolicy

YearYearAgeAge


PremiumPremium

AccountAccount

Value*Value*

DeathDeath



PremiumPremium

AccountAccount

Value*Value*

DeathDeath


27 87 $0.00 $28,000.00 $1,000,000.00 11.41 %

28 88 $0.00 $25,000.00 $1,000,000.00 10.85 %

29 89 $0.00 $20,000.00 $1,000,000.00 10.34 %

30 90 $0.00 $15,000.00 $1,000,000.00 9.88 %

31 91 $0.00 $14,000.00 $1,000,000.00 9.45 %

32 92 $0.00 $13,000.00 $1,000,000.00 9.06 %

33 93 $0.00 $12,000.00 $1,000,000.00 8.71 %

34 94 $0.00 $11,000.00 $1,000,000.00 8.37 %

35 95 $0.00 $10,000.00 $1,000,000.00 8.07 %

36 96 $0.00 $8,000.00 $1,000,000.00 7.78 %

37 97 $0.00 $75,000.00 $1,000,000.00 7.52 %

38 98 $0.00 $5,000.00 $1,000,000.00 7.27 %

39 99 $0.00 $2,500.00 $1,000,000.00 7.04 %

40 100 $0.00 $1,000.00 $1,000,000.00 6.82 %

* Non-guaranteed






itm-twentyfirst.com

Trust Relationships

Grantors





David and Jackie

Thompson Insurance


Mr. David J. Thompson

123 Main St.

Cedar Falls IA 50613

14-Apr-1950 (66)

Beneficiaries





David and Jackie

Thompson Insurance


Mr. Billy T. Thompson

1212 Main St.

Chicago IL 41515

05-May-1995 (21)

Policy OwnerOwnerOwner %% Trust Account #Trust Account # Federal Tax IDFederal Tax ID


Insurance Trust Dated 6/6/2006100.00% 06062006 060620060

Policy BeneficiaryBeneficiaryBeneficiary %%


Insurance Trust Dated 6/6/2006100.00%




Current Trustee provided information.


itm-twentyfirst.com

Review DetailsCurrent ReviewCurrent Review Last ReviewLast Review ChangeChange

Variances 4 1

Maintenance Items 0 1

Action Items 1 5

Policy Grade F B

Carrier Grade F F


Net Death Benefit $1,000,000.00 $1,000,000.00

Net Cash Value $81,251.00 $81,251.00

Projected Lapse Year Policy Year 21 35

VariancesFieldField Client ProvidedClient Provided Carrier ProvidedCarrier Provided Date of ResolutionDate of Resolution


Is Policy Currently Assigned N/P No

Policy Beneficiary Name



(100 %)

Jackie Thompson (100 %) 04-May-2015

Premium Mode Quarterly Annual

Split Dollar N/P No




Variances should be dealt with accordingly and ITM TwentyFirst should be alerted to resolution.

Check marks note the changes since last review and provide easy way to track year to year differences that should be dealt with.


itm-twentyfirst.com

Action ItemsDescriptionDescription

ALERT – Increase in current premiums has been determined to continue coverage to maturity. Contact Grantor and request an increase in the fundsbeing gifted to allow the policy to be continued to policy maturity. See the Policy Review Profile for additional information on premium required to sustain policy.If the Grantor is unable or unwilling to increase premium payments, consider all other options available after meeting directly with the Grantor and/or TrustBeneficiaries. Reduction in the amount of coverage or policy replacement may be viable options.

Maintenance ItemsDescriptionDescription




Action and maintenance items should be reviewed for each report and dealt with accordingly.


© ITM TwentyFirst 2017. All rights reserved.

itm-twentyfirst.comMinneapolis, MN Office T: 612.371.3008New York, NY Office T: 212.378.6730Cedar Falls, IA Office T: 866.384.2766

DisclaimerThis report is based in part on information provided by third parties, including life insurance carriers, general agencies, and VitalSigns (which

provides all information relating to carrier financial profile, ratings and Comdex information). While ITM TwentyFirst has obtained information from

sources it believes to be reliable, ITM TwentyFirst does not perform an audit of such information and undertakes no duty to do so. Policy funding

options are based on certain key assumptions, including the timely payment of premiums, crediting rates, policy charges, dividends and expenses.

In no way does ITM TwentyFirst guarantee that the policy will perform as projected under the various funding scenarios. Furthermore, in no way

does ITM TwentyFirst guarantee that the projected rates of returns and net values will be achieved. The life expectancy is not a prediction of how

long an individual will live, but rather the average survival time amongst a particular group based on insurance industry tables. There can be no

guarantee that the mortality tables used to project the insured�s life expectancy are the best tables and criteria for the particular insured. ITM

TwentyFirst expressly disclaims and nothing contained herein is intended, and shall not be construed or interpreted, to mean, that ITM

TwentyFirst is rendering any estate planning, financial planning, insurance, investment, legal, tax or any other type of advice, counsel or opinion to

any person. ITM TwentyFirst does not and expressly disclaims accepting or assuming any fiduciary obligation, liability or responsibility with respect

to any life insurance policy owner, insured or beneficiary. All decisions made concerning the life insurance policy and any changes or adjustments

thereto must be made by the policy owner and its advisors based on their specific objectives.

ITM TwentyFirst, its affiliates, as well as their directors, officers, shareholders, employees or agents (collectively, "ITM TwentyFirst Parties") do not

guarantee the accuracy, completeness or adequacy of this material, and ITM TwentyFirst Parties shall have no liability for any errors, omissions, or

interruptions therein, regardless of the cause, or for the results obtained from the use of the information provided by the ITM TwentyFirst Parties.

ITM TwentyFirst PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF

MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. In no event shall ITM TwentyFirst Parties be liable to any party

for any indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including,

without limitation, lost death benefits, lost profits and opportunity costs) in connection with any use of the information contained in this report

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strict liability in tort, by statute or otherwise) for any and all claims in any manner related to report will be the payment of direct damages, not to

exceed the amount of fees paid by client to ITM TwentyFirst for the specific report and related services.

Contact UsMinneapolis OfficeMinneapolis Office

333 South Seventh Street, Suite 300

Minneapolis, MN 55402

612.371.3008

New York OfficeNew York Office

1271 Ave of the Americas, Suite 4300

New York, NY 10020

646.647.1130

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119 E. 4th Street

Cedar Falls, IA 50613

319.266.2766

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