Case Success: Mutual of Omaha’s Underwriting Navigates a Split Dollar Case
Split dollar cases are often complicated by the unique financial underwriting documentation they require. In this case, Rhyne Bell, Chief Underwriter at Mutual of Omaha was able to assist the Member Firm by identifying the documentation needed to justify the coverage, resulting in $115,120 of target premium placed at Mutual of Omaha. Read on for the details!
AT A GLANCE
Underwriting: Mutual of Omaha’s Underwriting navigates through a Split Dollar Case
Carrier: Mutual of Omaha
Product: Life Protection Advantage IUL
- A 67-year-old male was seeking $4,000,000 of split dollar coverage as an executive benefit.
- Rhyne Bell, Chief Underwriter, Mutual of Omaha
- Mutual of Omaha’s Life Protection Advantage IUL
- The client was a long-time CEO of a credit union, and the board was looking to provide an executive benefit. The executive benefit was structured as a collateral assignment split dollar arrangement subject to IRC 7872.
- Under this arrangement, the client would be the owner of the policy and the credit union would loan premiums to the executive.
- The financial underwriting on cases like this is often difficult, as many underwriters are unfamiliar with the intricacies of split dollar cases. Upon learning the reason for coverage, Rhyne Bell, Chief Underwriter at Mutual of Omaha, is quite knowledgable and was able to provide a very list of items needed to approve the coverage, including:
- A cover letter detailing the Client’s background with the credit union and plan structure to include the use of a SPIA to pay for the premiums.
- Two years of tax returns to verify compensation from the credit union
- A copy of the split dollar agreement
- With a high level of understanding on how a business split dollar agreement works, Rhyne was able to simplify the process for the Member Firm, allowing for $115,120 of target premium to be placed at Mutual of Omaha.