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4 Responses

1. Bill, on June 9, 2008 at 6:27 PM said:

   Survivorship Life Insurance

   Survivorship life, or second-to-die, life insurance policies offer a lower-cost option to joint life, or first-to-die, policies. The second-to-die policy offers estate liquidity for taxable estates when assets are transferred from the decedent (formerly the surviving spouse) to beneficiaries.

   Surviving spouses receive an unlimited marital deduction, so generally there are no estate taxes to pay, and no need for first-to-die provisions. This is perhaps why second-to-die policies are gaining in popularity. Note that estate planning may be required in order to maximize the applicable exclusion amount for the first decedent’s estate.

   However, second-to-die policies offer no liquidity for buy-sell agreements. If the decedent is a 50% owner of a medical practice, a second-to-die policy would not generate any proceeds to buy the decedent’s share. This would be a significant disadvantage to medical practice owners who own second-to-die policies.

   -Bill Winterberg
   Pacific Northwest.

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2. Executive-Post, on June 12, 2008 at 11:45 AM said:

   ANSWER:
   Second-to-die life insurance for medical professionals, and others, has two main advantages:

   Fist, it is often less expensive to purchase than a single life policy.
   And, second, if properly purchased and maintained, second-to-die life insurance proceeds can be free of both income tax and estate tax.

   Rationale:

   Proceeds from second-to-die insurance can be used by the ultimate beneficiaries, usually the children, to help pay the eventual estate tax on the medical practice or family stock they inherit, etc. And, the estate tax may be significant, especially if the second, insured individual dies without having remarried because the marital deduction is then unavailable.

   To have proceeds excluded from a doctor’s estate, s/he must set up a trust which purchases the insurance. S/he can then make annual gifts to the trust which may qualify as a present interest, making the gifts eligible for the annual gift tax exclusion.

   However, before purchasing second-to-die insurance, the doctor should see how it compares to a traditional single life insurance policy.

   Dr. David Edward Marcinko; FACFAS, MBA, CMP™
   Publish-in-Chief and Independent Health Economist
   Former Certified Financial Planner™
   Former insurance agent

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3. Beverly Motley, on July 15, 2008 at 5:40 PM said:

   Greetings!

   As a compensation professional, what kinds of trends are you observing in physician compensation for multi-specialty hospitals in the Tacoma/Seatle Washington state locations? Additionally, what innovations (in 2008) are observed in the manner doctors and hospital leadership are compensated? Please e-mail today if possible to Kkyewu1@aol.com. Thank you ever so much!

   Warm Regards,
   Bev Motley

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4. Dr. David Edward Marcinko MBA CMP™, on October 28, 2013 at 12:40 PM said:

   On CAT Bonds

   Q: A doctor asked us recently: so exactly what are the newer CAT bonds?

   A: They are high-yield debt instruments used by insurance and reinsurance companies, governments and corporations (all known as sponsors) to cover large losses that they might incur from hurricanes, typhoons and windstorms, or natural disasters like earthquakes.

   These bonds cover major events that are believed to occur once every 100 or 200 years. CAT bonds allow their sponsors to package such risks into securities which are then sold in the capital markets via structured investment vehicles (SIVs).

   And, not only do CAT bonds transfer the risk of natural disasters from the sponsors to bond investors, but as with the banking conduits of the financial crisis of 2008, the sponsors need not report SIV assets or liabilities on their balance sheets.

   Dr. David Edward Marcinko; FACFAS, MBA, CMP™
   Publish-in-Chief and Independent Health Economist
   [Former Certified Financial Planner™]
   http://www.CertifiedMedicalPlanner.org

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