Life insurance scenarios (existing or new policies, ILITs)

Modeling insurance transfers or the creation of new hypothetical insurance policies

1. In the Hypothetical Waterfall, click the Hypothetical Transfers button in the right hand corner.

2. Select Create Hypothetical Transfer.

3. Select Life insurance

4. Under Policy owner, fill in the details of the hypothetical trust that you want to create to hold the policy (for example, this would be a new ILIT that will be funded)

   1. If you would like to choose an existing entity as the policy holder, click the Create a new hypothetical trust toggle to turn it off and select the entity that will hold the policy

5. In the Policy details section, select the existing policy you would like to transfer or click Create hypothetical policy if you would like to model the creation of a new policy

   1. If creating a new policy, fill in the policy details, including the death benefit and premium amount

6. In the Funding details section you will specify the ongoing transfers that will fund the insurance premium payments

   1. Specify the entity that transfers are coming from

   2. Specify the amount of transfer and whether it's a one-time or recurring transfer

   3. Specify the year that you would like the transfer to begin

   4. Specify when you would like the transfer to end

      1. If you select year, the transfer will end during the specified year

      2. If you specify policyholder's death, the transfer will end in the year that the policy holder dies according to the waterfall assumptions

      3. If you specify trust termination, the transfer will end only when the trust has fully distributed all assets and ceases to exist

   5. Specify the type of transfer

      1. Select annual exclusion gift with Crummey powers if the transfer will not deplete exemption

      2. Select taxable gift if the transfer will deplete exemption

7. Click Create transfer to finalize the hypothetical transfer