To view this email as a web page, click here.                                                                                                    December 10, 2007

On behalf of The Potomac Group, I am pleased to invite you to our 2008 Spring Meeting at the Ritz Carlton in New Orleans on  March 10-11, 2008. 

We hope you will make plans to join us and take advantage of this unique opportunity to experience the Ritz's genuine Southern hospitality and unique flair. At the same time, you'll learn great new sales concepts from our industry's leaders and have a unique opportunity to network with your peers.

Why attend? We have planned an exciting mix of programs, interesting and dynamic speakers, and fun events to make this a productive and enjoyable meeting. This year's Spring Meeting will also feature our first ever Premium Financing Town Hall. The Town Hall panel will bring together senior carrier representatives, funders and top agents to address the premium financing market. 

I encourage you to SAVE THE DATE, March 10-11, for the 2008 Spring Meeting in New Orleans. Stay tuned for additional details!

Teague Wright, SVP Sales, The Potomac Group
 

AIG American General
- AIG Income Advantage VUL Webinar Schedule

AXA Equitable
- Depend on the Strength of AXA Equitable
- Why AXA Equitable?

ING
- Hybrid Premium Finance Update
- Welfare Benefit Plan Update
- New ING ROP Term/Divorce Planning Flyer Geared to Attorneys
- ING GSUL Processing Deadline
- Section 79 Permanent Insurance Benefits Unaffected by Recent IRS Guidance

North American Company
- Take a Look at NA's Guarantees on Both Term and UL

Protective Life
- Introducing Protective’s ProValue UL
 

Special Report (December 2007)
-  IRS Issues Temp Regulation for EOLI Info Reporting

Special Report (December 2007)
-  NY Ins Department Revised Proposal: Viatical Settlement Legislation
 

Case of the Week:
Premium Finance with Exit Strategies

The Problem:
A 65-year old widow has an estate value of $20 million, including a $4 million stock portfolio. Her professional advisors have told her that estate settlement costs (including estimated federal estate taxes) will approach $10 million at her death.  To offset these costs, the client has agreed to purchase a $10 million life insurance policy. However, the client is adamant about not paying any gift taxes to solve the problem. She has already used her lifetime gift exemption and has committed most of her annual exemptions. What are her options?

A Solution:
Private or commercial premium financing combined with the use of a Grantor Retained Annuity Trust (GRAT) and an Irrevocable Life Insurance Trust (ILIT). This client could consider privately or commercially financing the premium. This would allow her advisors to leverage current assets and reduce the need for gifting premiums to a trust to fund life insurance premiums. However, premium financing is not a long term solution for most clients.  As such, it is important to make certain that there is an exit strategy in place that may be exercised, if needed, during the client’s lifetime.

How It Works:
The client simultaneously establishes a GRAT and an ILIT. The ILIT will be the GRATs sole remaining beneficiary. In addition, the ILIT will purchase and own a life insurance policy on the grantor’s life, with the face amount at least equal to the grantor’s projected liquidity need at death  (although, ROP is often included). The grantor transfers assets such as FLP interests or stocks to the GRAT. Thereafter, the GRAT pays the grantor an annual annuity for a term of years.  Often, the GRAT term will be correlated to the expected term of the loan.

At the end of the GRAT term, the trust’s assets are transferred to the remaining beneficiary – the ILIT. The ILITs trustee may use these assets to repay the lender and terminate the financing arrangement.  Alternatively, the assets can be invested by the trustee to provide resources to pay loan interest and/or down the premium financing loan.  At the end of the day, the trustee has the flexibility to put the insurance in force today, plan for the uncertainty of estate taxes, and minimize current cash flow and gift taxes.

Contact Advanced Markets for a list of financing options or a more detailed explanation of how this idea can work for your clients.
 

AIG American General
- Year-End Processing Deadlines

American National
- Year-End Cut-off for New Business

AXA Equitable
- Year-End Processing Deadlines

Genworth Financial
- 2007 Year-End Commission Cycle

Hartford
- Processing Procedures for 2007 Holiday Season

John Hancock
- Guidelines for Timely Year-End Processing

ING
- End-of-Year New Business Deadlines

Lincoln Financial
- 2007 Year-End Plan

MetLife
- 2007 Year-End Life New Business Deadlines

Mutual of Omaha
- Year-End Pay Schedule & Office Hours

Old Mutual Financial Network
- End-of-Year New Business Deadlines

Phoenix
- Final 2007 Closing on December 14

Principal Financial
- Expedite Your Year-End Life Business

Prudential
- 2007 Prudential Service Update

West Coast Life
- Year-End Processing Schedule
 

 

Upcoming Calls and Events

Teleconference: Protecting Your Client's Paycheck with DI
Date: 12.12.07 - 3:00 pm EST
Register Online Now or call 888.241.1254

Teleconference: Sun Life: The New Executive UL and VUL
Date: 12.18.07 - 3:00 pm EST
Register Online Now or call 888.241.1254

Teleconference: Ask the Doctor: The Baby Boomer Market
Date: 01.09.08 - 3:00 pm EST
Register Online Now or call 888.241.1254

Teleconference: John Hancock Presents Fruits and Nuts
Date: 01.15.08 - 3:00 pm EST
Register Online Now or call 888.241.1254

Teleconference: Genworth: Corporate Term Carve-Out
Date: 01.16.08 - 3:00 pm EST
Register Online Now or call 888.241.1254

 

questions?

Call The Potomac Group at
800.722.1600, ext. 6446 for more information.
 

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The Potomac Group, 6550 Rockspring Drive, Suite 320, Bethesda, MD 20817