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Vol. 79, No. 1, January 2025

FEATURED ARTICLES

The Risks of Premium-Financed Life Insurance Arrangements and the Role of the Financial Professional
Gerard J. Vanderzanden, CLU, ChFC, CLTC
Richard M. Weber, MBA, CLU, AEP (Distinguished)
Michael J. Lockitch, CFA
With substantial index universal life (IUL) policy premiums anecdotally funded through third-party loans, it might be expected that buyers would be sophisticated and apply customary due diligence practices when considering this approach to funding. However, despite the popularity of these arrangements among high-net-worth individuals, the various risks—not just the opportunities—are poorly understood. As a result, a growing number of investors have initiated lawsuits with allegations of surprise, anger, and claims of "being taken" after entering premium financing transactions. The authors provide a case study exploring the analytical techniques that should be performed before plan implementation and best practices that address the confusion among producers and consumers when evaluating how insurance products and premium financing interact under volatile economic conditions.

Using Consumer Research to Improve Retirement Outcomes
Anna M. Rappaport, FSA, MAAA
Traditional financial planning models make certain assumptions about planning and life-cycle finance. These assumptions do not recognize the reality facing many Americans. Consumer research and the recent experience of financial wellness firms offer a different picture of the reality facing households and a model for improving financial results which reflects a wide range of situations. This article develops the idea of "meeting people where they are," providing information about the financial planning needs of individuals in various situations. It challenges advisors to think about these situations and their business models and to identify additional opportunities where they can serve. It synthesizes published research from several sources including real-life experience and proprietary research, to provide a realistic picture of the gaps in conventional planning and the need for more advisory support.

DEPARTMENTS

Editor’s View
By the Numbers: The 2025 Indexed Retirement and Social Security Numbers
Kenn Beam Tacchino, JD, LLM
We present the 2025 indexed retirement and Social Security numbers in an easy-to-read table. Feel free to photocopy this table and keep it handy.

Accounting & Taxation
Key Points of the Revised Required Minimum Distribution Regulations and Inherited Accounts
Bill Harden, CPA, ChFC, PhD
We provide a broad overview of the required minimum distribution (RMD) provisions for defined-contribution/IRA types of accounts. It is important to work with clients to make sure that they have planned beneficiaries properly and understand how the new rules related to RMDs will affect family wealth plans.

Executive Compensation
The Impact of the New Loper Bright Decision on Executive Compensation
Paul J. Schneider, JD, LLM
This column analyzes the historical and legal background associated with the Chevron doctrine, the Supreme Court’s reasoning that supports its decision to overturn the Chevron doctrine, and the potential impact of the Loper decision on the Treasury’s regulatory authority.

Financial Gerontology
The Future of Financial Planning Is about Understanding Gen C: Generation Caregiver
Sherri Snelling, MAG
The bonus years of life have not only put a spotlight on older Americans but also another group of people who are essential to the nation’s long-term care support: family caregivers. While there is an amazing growth trajectory of octogenarians (80-year-olds), nonagenarians (90-year-olds), and centenarians (100+ years), there are also challenges—physical, emotional, and financial—for the younger generations caring for these oldest adults. There is a shortage of professional care workers in both home and congregate living environments; an impact on employees, employers, and workplaces; and potentially negative effects to the health and wealth of the family caregivers. These issues are driving new programs, services, and solutions that become essential knowledge tools to strengthen advisor-client relationships. Society is shifting from retirement planning to longevity planning that includes caregiving. The time is now for advisors to look at innovative approaches and potential new partnerships to best serve this new group of clients—Gen C: Generation Caregiver.

Long-Term Care Insurance
The Unvarnished Truth about Long-Term Care Insurance
Ronald R. Hagelman Jr., CLTC, CSA, LTCP
Perhaps with the exception of universal life insurance, there has never been a product offering that created a brand-new unexplored market with such initial fanfare as long-term care insurance (LTCI). LTCI presented a new, and most would agree, long-overdue dedicated attempt. We take a look at the history and future of LTCI.

Practice Management
The Connelly Decision: Bad Facts or Bad Law?
Douglas B. Richards, JD, MBA, CLU, CFP
The Supreme Court’s decision in Connelly v. United States upended the world of life insurance planning for parties to an entity-redemption buy-sell agreement. It held that life insurance proceeds received by a business would be included in the valuation of the business for estate tax purposes but an offsetting obligation of the business to pay those same proceeds to the deceased shareholder’s estate in redemption of the shares would not.