Working with the
client’s lawyer and other tax advisors,
Advantage can custom design life insurance in
any number of ways depending on the client’s
situation and goals. For Advantage clients who
desire a policy that qualifies as life insurance
under the Code, the standard policy model is a
simple standard universal variable life insurance
policy that allows the Policyholder to have access
to the maximum cash surrender value at all times.
Due to the need to comply with Section 7702 of
the Code, this policy structure has limits to
the growth of the cash surrender value that may
require withdrawals from the policy or the qualification
for and purchase of additional insurance. Alternative
policy structures on a customized basis could
include:
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A Restricted Cash
Surrender Value Policy that limits the cash
surrender value on a formula basis so as to
allow for unlimited growth of the Death Benefit
via investment performance while also substantially reducing mortality charges
imposed over the life of the policy; or
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A Frozen Cash
Surrender Value Policy that limits the cash
surrender value of the premiums paid. |
These and other potential custom policy structures
can be used to accentuate the advantages desired
by a client in a specific planning situation
in concert with the client’s advisor.
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