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Buy Only the Term Portion of the Second to Die UL Over the Insured’s Entire Life Span, and Invest the Difference

Target market: High net worth individuals with spousal estates of over the $10.6 million life time, lump sum estate deduction.

Ideal client: High net worth individuals that are on a path to grow their family estates above $10 million over a period of years.

Average Case Size: $1 Million to $10 Million plus.

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The Model:

  1. Save approximately 50% in annual premiums when purchasing a Second to Die Life Time Insurance Policy. Investing in a Universal Life policy for life without the savings, in most cases, should be less expensive than the corresponding policy with savings. The cost of the UL policy with the savings stripped from the policy is normally about 50% less expensive.
  2. Invest the difference in mostly discounted high grade securities. TAMAR SECURITIES, LLC’s Fixed Income Portfolios (FIP) include discounted taxable bonds, double tax-exempt and taxable municipal bonds, preferred and convertible preferred stocks, convertible bonds, and foreign-denominated bonds. Our firm emphasizes discounted high grade debt securities over equity and alternative investments in order to achieve both constant annual income returns and Fixed Income price appreciation. In many cases, this discipline allows for an efficient tax benefit. TAMAR, may also use proceeds from bonds and cash in accounts to pick up stocks, funds or other equity securities (Please, visit the website to find out more about our firm’s equity advisory programs: TAM, TAF, and MVS).
  3. Flexible alternatives paying for the annual premiums of the second to die term portion of the UL policy. Generally, Fixed Income Portfolios (FIP) can be securitized in order to pay annual life insurance premiums. For example, in today’s low interest rate environment the spread between a portfolios’s annual return on investments and the cost of securitization should be substantially positive. Securitization can provide the insured with the freedom to borrow from him/herself, at attractive market rates and independently of the closed ended platform of the conventional life insurance companies.
  4. Annual gifting. Ongoing annual gifting should be used in order to augment the cash value, and return on investment of the underlying independent investment portfolio.
  5. Meaningful savings on investment management fees. TAMAR SECURITIES, LLC’s Turnkey Operation Platform is not a profit center. It provides: direct access to multiple institutional fixed income inventories, Superior Bid/Buy and Bid/Sell execution, and Superior transparency. This innovative execution, and management system, in most cases, can bring about investment management savings that are then passed to the firm’s clients. Same Day Allocation
  6. On the second to die death, receive both: 1) The estate death benefit, and 2) The investment portfolio (“Cash Value”). The dual distribution of assets on the second to die is normally seamless: a. The Trust account receives the assets in the investment account b. The Trust account receives the value of the second to die life insurance proceeds.
  7. Pay estate taxes due with the life insurance proceeds without the need to liquidate the deceased estate in a costly fire sale. In some cases, estates carry illiquid investments. When estate taxes are due, this can force an inopportune costly fire sell of the deceased estate. The life insurance proceeds are designed to pay the estate taxes; and therefore, avoid a forced liquidation of an estate. The objective of our discipline of “Buy Only the Term Portion of the Second to Die UL Over the Insured’s’ Entire Life Span and Invest the Difference”, is for the beneficiaries of the estate to potentially attempt to own it in its entirety as well as receiving the entire cash value of the portfolio.

This brochure is solely for informational purposes. Investing involves risk and possible loss of principal capital. No advice may be rendered Tamar Securities, LLC unless a client service agreement is in place. Please contact us at your earliest convenience with any questions regarding the content of this presentation and how it may be the right strategy for you.
Tamar Securities, LLC is a Registered Investment Adviser. This brochure is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Tamar Securities, LLC and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Tamar Securities, LLC unless a client service agreement is in place.