Coventry Edwards-Pitt, Managing Director at Ballentine Partners, was quoted in a recent article in the Investment News: “Tax fears spell opportunity for insurance agents: Advisors pitched tactics that permit tax-free income, wealth transfers.” The piece describes the likely tax increase and what strategies advisors are recommending to their clients.
“When taxes are rising, each of these strategies bears careful consideration. We’re certainly looking at the strategies, given rising tax rates, but they’re a little more complicated than they seem at first blush,” noting insurance companies’ linear assumptions for rates of return, their high fees and the penalties for premature policy cancellation. The article explains that Coventry believes that the tax advantages of insurance can be overplayed and that while she prefers to use life insurance for its traditional purpose – providing liquidity to heirs at death – she’s taking some appointments with insurance companies to ensure she doesn’t miss anything that might be to her clients’ advantage. “Everyone’s out there thinking about what to do in a rising-tax environment and about the different efficient strategies they can employ. This is just one of the many things that are on the table.”