Potentially Increase Equity Yield by up to +150bps

Wrapping your current equity funds in ICOLI can increase your yield.

Insurance company owned life insurance (ICOLI) is an investment strategy that insurance companies commonly use to wrap their on-balance sheet investments. Wrapping investments – often the same investments they already hold – in ICOLI makes the investment gains tax-free, allows for tax free rebalancing and reduces the associated risk-based capital charges. The result is more yield and more efficient use of investment capital.

Three ways to improve yield on assets with ICOLI:

  1. Tax advantages of ICOLI. Simply wrapping your existing equity fund produces an annual yield enhancement of up to +150 bps.
  2. Rebalancing is not a taxable event. Some products have hundreds of funds to choose from. No more holding an asset just because of tax consequences.
  3. Less capital reserving enables you to make a more efficient use of your invested capital.

 

If you would like to explore how ICOLI yield enhancement can affect your company’s portfolio return, please reach out or schedule a call via this link.

 

Jacob Bosacki, JD
Senior Consultant
(920) 819-4365
Jacob.Bosacki@mbsfin.com

 

 

About Mullin Barens Sanford Financial

Through a powerful combination of independence and experience, Mullin Barens Sanford Financial and Insurance Services (MBS Financial) is a leading consulting firm that assists companies with 409A and other executive benefit needs.

Disclaimer:

Variable Universal Life insurance combines the protection and tax advantages of life insurance with the investment potential of a comprehensive selection of variable investment options. The insurance component provides death benefit coverage and the variable component gives you the flexibility to potentially increase the policy’s cash value.

The materials are designed to convey accurate and authoritative information concerning the subject matter covered. However, they are provided with the understanding that Mullin Barens Sanford Financial does not engage in the practice of law, or give tax, legal or accounting advice. For advice in these areas, please consult your appropriate advisors.

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