Value

Private Placement Insurance can serve as a strategic investment tool for ultra-affluent investors to reduce the income tax burdens associated with traditional and alternative investments. Because they can only be offered to individuals who are qualified purchasers and accredited investors (as defined by the Securities Act of 1933), private placement variable universal life (PPVUL) and variable annuities (PPVA) offer high-net-worth clients access to investment alternatives and customized product designs that are difficult to recreate in traditional retail or registered products. They can be an optimal tool to address a multitude of financial, income, and estate tax planning objectives.

Although the tax advantages are often the primary drivers for investing through private placement insurance products, there can be other benefits to investors, including elimination of K-1 reporting and additional creditor protection. Investors turn to PPVUL and PPVA products because the overall cost of insurance charges is generally less than the tax costs the investment would ordinarily create.

Because of its preferential treatment from an income tax perspective, insurance must be properly structured in order to assure it maintains its unique tax benefits. When considering private placement products, clients should work with brokers experienced in structuring policies for high-net worth clients and in working with multiple insurers to help obtain the most favorable underwriting outcome. As a member firm of M Financial Group, Greenberg, Wexler & Eig has access to proprietary private placement products and additional insurance capacity. Our advisors have the experience to guide clients through the implementation of these complex tools as well as the commitment and infrastructure to provide high-level long-term service.

Underwriting is an extremely important and sensitive step in the process of securing insurance coverage. Where many see it only as a process in which an insurance carrier assesses the risk of insuring a client’s life, we view underwriting as an opportunity to advocate on behalf of our clients by presenting the risk effectively to the carrier, negotiating to increase value, and creating a clear path to policy placement.

Our firm’s underwriting experience—as well as our commitment to placing high-quality business—plays a critical role in our ability to offer high-quality underwriting support and service. We understand the complexities of the process and have resources with underwriting experience in a variety of areas, including exam results, case presentation, carrier negotiations, and capacity management on larger cases.

As a Member Firm of the M Financial Group, we have access to a variety of underwriting resources that enhance our efforts. M Financial is a leader in delivering product differentiation to clients while also sharing our focus on process differentiation. This allows us to have a direct and significant impact on the effectiveness and efficiency of the work we do for clients. Further, M Financial is the only distribution system that invests its own capital in the business placed by its member firms. Through M Financial Re, as of 2021, M Financial invests upward of $50 million a year in the high-quality business placed by M Member Firms. Reinsurance provides access to carrier pricing assumptions, which allows M Financial to effectively track experience, while monitoring changes in policyholder interests. ¹

The following is an overview of the key components of our underwriting approach, which continues to differentiate us in the marketplace.

¹ Power of M

Greenberg, Wexler & Eig is committed to a lifetime of service.

We are consistently in contact with our clients, reminding them of premium payments, making them aware of opportunities for their current policies, and letting them know if their policies are performing as planned. We proactively monitor our clients’ insurance portfolios to help them navigate the changes that can impact policy performance.

As an M Financial member firm, our clients have benefited from M’s commitment to in-force management. As a pioneer of the concept that existing clients should be treated just as well as future clients, M’s in-force management is based on the belief that performance and cost should be measured over the life of the policy, not with an initial illustration or first-year premium. This commitment to preserving the effectiveness and efficiency of M exclusive products has resulted in 54 re-pricings for both new and in-force policies. Since 1996, upwards of $200 million of cost reductions have been passed along to M Member Firm clients. Exclusive products are a significant component of M Financial’s success. Available exclusively through M Member Firms, M exclusive products are designed and priced using M Financial’s unique mortality, persistency, and face amount experience.¹

Insurance can be complicated and it’s important to have advisors who are committed to seeing your insurance objectives through from design to claim. At Greenberg, Wexler & Eig, we believe exceptional service should be standard.

¹ Power of M

Life insurance is complicated, and client’s needs often change over time and new products may be more suitable to meet the client’s goal. Our clients benefit from periodic Life Insurance Portfolio Reviews which provide much-needed clarity and understanding.

A Life Insurance Portfolio Review is a thorough, unbiased written description and assessment of a policy owner’s existing life insurance portfolio. Life Insurance Portfolio Reviews assess:

• Clients’ needs and objectives
• In-force policy performance versus original expectations
• Carrier financial strength, ratings, and outlook
• If the client’s underwriting classification can be improved
• If a more suitable product exists to achieve the client’s objectives
• What actions can be taken to bring the current portfolio in line with objectives

The typical Life Insurance Portfolio Review is fee-based and takes 4-8 weeks to complete. If the client determines that the purchase of new life insurance is suitable, they may or may not choose to purchase the insurance through Greenberg, Wexler & Eig. Either way, we will communicate our recommendations and observations to the client’s advisors and answer any questions they may have while acquiring the new policies.