When changing the ownership of a life insurance policy by gift or sale, many clients report sticker shock at the numbers provided to you by the insurance company. In addition, some insurance companies are reluctant to provide valuations of policies. Such valuations are crucial to many basic transactions, including charitable giving and estate planning transactions.
The regulations about valuing life insurance policies for gift and estate purposes, §§20.2031-8 and 25.2512-6, were last looked at in 1974. The policies today are very different from the annual renewable term (ART) and whole life policies at that time – but the regulations were designed with those two products specifically in mind.
Pluris values all types of life insurance policies, as well as split-dollar arrangements. For these valuations, thorough research and empirical evidence is critical – especially where the outcome of the transaction is sensitive to the fair market value of the policies or receivables valued.
To inquire about our insurance policy valuation services, or to request a white paper on the issue, please contact us.