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Regulating Viatical Settlements: Is The Invisible Hand Picking The Pockets Of The Terminally Ill?, Russell J. Herron
Regulating Viatical Settlements: Is The Invisible Hand Picking The Pockets Of The Terminally Ill?, Russell J. Herron
University of Michigan Journal of Law Reform
The newly emerging viatical settlement industry has attracted considerable attention from both insurance regulators and advocates for the terminally ill. In a viatical settlement, a terminally ill person names a viatical settlement company as beneficiary under his life insurance policy in exchange for an immediate lump-sum cash payment of less than face value of the policy. To date, viatical settlement payments to people with AIDS (PWAs) have been disturbingly low as a percentage of the face value of PWA policies. This Note examines the few enacted viatical settlement regulations and the National Association of Insurance Commissioners' model regulations as they …
Estate Tax--Life Insurance--Section 2035 As A Basis For Including Life Insurance Proceeds In The Gross Estate Of An Insured Who Paid Premiums On A Policy Owned By Another Person, Michigan Law Review
Estate Tax--Life Insurance--Section 2035 As A Basis For Including Life Insurance Proceeds In The Gross Estate Of An Insured Who Paid Premiums On A Policy Owned By Another Person, Michigan Law Review
Michigan Law Review
If a decedent possessed any of the incidents of ownership of a life insurance policy, or if the policy proceeds were payable to his executor, the entire amount of the insurance proceeds is included in his estate for estate tax purposes under section 2042 of the Internal Revenue Code of 1954 (Code). However, if the decedent had transferred ownership of the policy to another person in a transaction that both met the requirements of section 2042 and was not regarded as "in contemplation of death," but continued to pay the insurance premiums until his death, it is unclear whether any …
The Regulation Of Specialty Policies In Life Insurance, Spencer L. Kimball, Jon S. Hanson
The Regulation Of Specialty Policies In Life Insurance, Spencer L. Kimball, Jon S. Hanson
Michigan Law Review
Every entrepreneur is vitally concerned with selling methods. Success depends upon sales. Sales depend upon desire for the product. Desire for most products, including life insurance, is not inherent but is created by the efforts of the entrepreneur. In the case of life insurance, an effective job of creating the desire, i.e., of selling, is usually necessary to convince a prospective insurance buyer that over a long period he should allocate a significant portion of his income to the purchase of an intangible such as life insurance.
Insurance Law- Business And Investment Limitations - Authority Of Foreign Life Insurer To Acquire A Fire And Casualty Subsidiary, G. E. Oppenneer
Insurance Law- Business And Investment Limitations - Authority Of Foreign Life Insurer To Acquire A Fire And Casualty Subsidiary, G. E. Oppenneer
Michigan Law Review
Plaintiff, a Connecticut life insurer, proposed to acquire a controlling stock interest in a fire and casualty insurance company. The New York Superintendent of Insurance, supported by the state Attorney General, advised that plaintiff would thereby disqualify itself from doing business in the state under the business and investment limitations of the Insurance Law. Plaintiff sought a declaratory judgment that its proposal was permissible. The supreme court denied plaintiff's motion for summary judgment, granted defendant's cross-motion and dismissed the complaint; the appellate division affirmed. On appeal, held, reversed, three judges dissenting. The legislature did not intend to extend the …
Federal Taxation - Tax Aspects Of Corporate Buy And Sell Agreement, Joel D. Tauber S.Ed.
Federal Taxation - Tax Aspects Of Corporate Buy And Sell Agreement, Joel D. Tauber S.Ed.
Michigan Law Review
It is the purpose of this comment to consider the tax problems connected with both types of "conventional" corporate buy and sell agreements. It should be recognized, however, that there are many questions of local law and business necessity that also exert influence on the use of such agreements.
Taxation - Federal Estate Tax - Insurance And Annuity Combinations, John B. Schwemm S.Ed.
Taxation - Federal Estate Tax - Insurance And Annuity Combinations, John B. Schwemm S.Ed.
Michigan Law Review
Decedent, aged seventy-six, invested in three single premium life insurance policies. Issuance of each was conditioned on the purchase of a single life, nonrefundable annuity of specified value, and no physical examination was required. Each combination was balanced so that the total premium, exclusive of loading charges, equalled the face value of the insurance. The resulting correlation between compound interest and annuity disbursements made the guaranteed payments to the annuitant correspond precisely with the expected income of a reinvestment of the entire deposit by the insurer. Decedent retained the annuity rights, but all present and future interests in the life …
The Limitation Of Taxation Of Transfers In Contemplation Of Death By The Revenue Act Of 1950, Edmund W. Pavenstedt
The Limitation Of Taxation Of Transfers In Contemplation Of Death By The Revenue Act Of 1950, Edmund W. Pavenstedt
Michigan Law Review
The Revenue Act of 1950 amended the estate tax provision dealing with transfers in contemplation of death, which has been on the books ever since the estate tax first appeared as a war emergency measure during World War I, by eliminating from this category all transfers made more than three years prior to the date of death. All transfers made within that period are deemed under the new law to have been made in contemplation of death (and hence are includible in the transferor's gross estate) unless the contrary is shown. Such a rebuttable presumption formerly was limited by the …
The Limitation Of Taxation Of Transfers In Contemplation Of Death By The Revenue Act Of 1950, Edmund W. Pavenstedt
The Limitation Of Taxation Of Transfers In Contemplation Of Death By The Revenue Act Of 1950, Edmund W. Pavenstedt
Michigan Law Review
The Revenue Act of 1950 amended the estate tax provision dealing with transfers in contemplation of death, which has been on the books ever since the estate tax first appeared as a war emergency measure during World War I, by eliminating from this category all transfers made more than three years prior to the date of death. All transfers made within that period are deemed under the new law to have been made in contemplation of death (and hence are includible in the transferor's gross estate) unless the contrary is shown. Such a rebuttable presumption formerly was limited by the …
Insurance-Insurable Interest-Joint Adventurers, Alan P. Goldstein S. Ed.
Insurance-Insurable Interest-Joint Adventurers, Alan P. Goldstein S. Ed.
Michigan Law Review
Plaintiff and the deceased were operating an airplane commercially. Plaintiff had purchased the plane, and was paying the deceased $25 per week plus half of the profits of the venture. The deceased acted as pilot, and was instrumental in obtaining business. Plaintiff took out insurance on the plane, and also on the life of the deceased, although their only relationship was through the joint venture. The plane was wrecked and the deceased was killed while on company business. The claim for the plane was paid, but the defendant refused to pay on the life insurance policy, claiming that the plaintiff …
Insurance-Effect Of Incontestable Clause In Suit For Reformation Of Policy, N. S. Peterman S. Ed.
Insurance-Effect Of Incontestable Clause In Suit For Reformation Of Policy, N. S. Peterman S. Ed.
Michigan Law Review
For over twenty years, defendant insurer accepted premiums on a life insurance policy issued to plaintiff. Defendant then discovered that a clerical error had been made in the original policy, as a result of which plaintiff's premium payments were approximately one-half the premiums defendant normally received for the type of policy actually issued. Defendant asked for reformation of the policy on the ground of mistake, and the trial court granted the relief sought. On appeal, held, reversed. The action was barred by the incontestable clause. Richardson v. Travelers Insurance Co., (App. 9th, 1948) 171 F. (2d) 699.
Insurance-Construction Of Policy-"Military Or Naval Service" Clause-"Aviation" Clause, Paul J. Keller, Jr., S.Ed.
Insurance-Construction Of Policy-"Military Or Naval Service" Clause-"Aviation" Clause, Paul J. Keller, Jr., S.Ed.
Michigan Law Review
Plaintiffs, six minor children of deceased, were beneficiaries of a $20,000 life insurance policy issued to deceased while a member of the United States Army. Traveling under Army orders, the deceased procured a permit from the operations officer at an Army airfield in Puerto Rico for space on a regular Army transport route to another Army field in Puerto Rico. The plane crashed, killing all of its occupants. The policy issued to the deceased contained an "aviation" clause and a "military service" clause, under both of which the defendant insurance company rests its defense. Held: Deceased was a "fare-paying …
Legal Liability For War Damage, John Hanna
Legal Liability For War Damage, John Hanna
Michigan Law Review
This article considers some of the rules for determining liability for economic loss in respect of war claims, especially as applied in connection with claims of life insurance companies for loss of premiums, of insurers of property for war risk insurance premiums, of property insurers for sums paid to foreign policyholders on war losses, and of owners seeking to recover for loss of expected profits. The rules discussed are broadly applicable to international claims in general.
Taxation - Federal Gift Tax - Integration With Income Tax, Katherine Kempfer
Taxation - Federal Gift Tax - Integration With Income Tax, Katherine Kempfer
Michigan Law Review
Beck in 1935 created an irrevocable funded insurance trust of $172,000 in securities together with seven policies of insurance on his life. The income from the securities was to be applied to pay the premiums on the policies and any surplus was to be distributed to his wife and daughter. At grantor's death the proceeds of the policies were to be added to the corpus of the trust and all income was to go to the same beneficiaries for life with remainders over. There was no possibility of reverter in the grantor and no right to alter, modify or revoke …
Taxation Of Annuity Contracts Under Federal Income Tax, Robert Meisenholder
Taxation Of Annuity Contracts Under Federal Income Tax, Robert Meisenholder
Michigan Law Review
A number of questions dealing with the taxability of commercial annuity policies under death tax statutes have received judicial consideration. By contrast, only a few questions dealing with the taxability of these contracts under income tax laws have been raised before the courts. But the income tax problems are equally important in terms of tax liability. Moreover, they will in the future assume an even larger significance in view of the large number of annuity contracts of various types which have been issued and are now being offered by insurance companies. Accordingly some explanation of these problems is warranted.
Federal Taxation Of Insurance Trusts, Allan F. Smith
Federal Taxation Of Insurance Trusts, Allan F. Smith
Michigan Law Review
The life insurance trust may take many forms and serve a variety of purposes, but for present purposes it may be defined as a trust, at least part of the corpus of which is a policy of life insurance, in which the duty of the trustee is to receive the proceeds of such policy and administer such proceeds as a trust. Such a trust, like any other, may be revocable or irrevocable, and may be funded or unfunded. These various types will be considered separately only where the tax results vary with the type. The present objective is to survey …
Insurance - Delay In Acting On Application - Tort Liability, William C. Wetherbee Jr.
Insurance - Delay In Acting On Application - Tort Liability, William C. Wetherbee Jr.
Michigan Law Review
Appellant, administrator of the deceased's estate, sued the defendant for damages caused by its negligent failure to accept or reject deceased's application for life insurance within a reasonable time. A deposit had been made on the premium, and, but for the delay, the policy would have been approved and the deceased covered by it at the time of his death. The jury returned a verdict for the appellant, who appealed when the judge rendered judgment non obstante veredicto in favor of appellee. Held, that the insurance company was under no duty to accept or reject the application within a …
Insurance - Supervision By The State - What Constitutes The Insurance Business, Thomas E. Wilson
Insurance - Supervision By The State - What Constitutes The Insurance Business, Thomas E. Wilson
Michigan Law Review
Plaintiff, a corporation, advertised that any person who bought goods from certain selected stores would be entitled to receive coupons, and when his coupons amounted to a certain sum he would be entitled to certain death and security benefits up to specified amounts. Plaintiff brought suit against the Insurance Commissioner of Pennsylvania to enjoin him from interfering with the plaintiff's business. Held, that the plaintiff was carrying on an insurance business and was subject to supervision by the Insurance Commissioner. Hunt v. Public Mutual Benefit Foundation, (C. C. A. 3d, 1938) 94 F. (2d) 749, certiorari denied (U. …
Bankruptcy-Disposition Of Insurance Policy Assigned To Beneficiary
Bankruptcy-Disposition Of Insurance Policy Assigned To Beneficiary
Michigan Law Review
Mrs. Humphrey was the beneficiary in an insurance policy taken out by her husband on his own life. He assigned this policy to her at a time when it was pledged to the insurance company for loans slightly in excess of the cash surrender value. Mr. Humphrey died after Mrs. Humphrey had filed her voluntary petition in bankruptcy. Held, the policy is not an asset of the bankrupt estate, but belongs to Mrs. Humphrey rather than the trustee. Curtis v. Humphrey, (C. C. A. 5th, 1935) 78 F. (2d) 73.
Contracts --Anticipatory Breach- Denial Of Liability As A Repudiation
Contracts --Anticipatory Breach- Denial Of Liability As A Repudiation
Michigan Law Review
A life insurance policy provided that the insured was to be paid a certain sum per month in case of permanent disability. A dispute arose between the company and the insured as to the proper construction of the contract. The company expressed willingness to perform the contract as it construed it, but this was a refusal to pay the monthly disability income. The insured brought an action to recover total damages for anticipatory breach, of the contract to pay the permanent disability benefits. Held, that the insurer had not made such an unequivocal refusal to perform the contract as …
Insurance - Failure To Act Promptly On Application - Tort Liability Of Insurer
Insurance - Failure To Act Promptly On Application - Tort Liability Of Insurer
Michigan Law Review
Although mere delay in passing upon an application for insurance cannot, as a rule, be construed as an acceptance of the offer for a contract of insurance, in recent years some courts have held insurance companies liable in tort where there has been delay in acting upon the policy and the loss sought to be insured against has occurred in the meantime. Plaintiff, to sustain a cause of action in tort, must prove negligence on the part of the insurer, or its agents, and that the policy would have been issued to the applicant but for the negligence. The suit …
Taxation -Income From Irrevocable Funded Insurance Trusts - Constitutionality Of Statute
Taxation -Income From Irrevocable Funded Insurance Trusts - Constitutionality Of Statute
Michigan Law Review
The settlor created irrevocable trusts to pay premiums on policies of insurance issued on his life in favor of irrevocably-named beneficiaries. Held, that sec. 219 (h), Rev. Acts 1924, 1926, making income from trusts taxable to the settlor, is constitutional. Burnet v. Wells, (U. S. 1933) 53 Sup. Ct. 7.61.1
Insurance - Death In Violation Of Law-Proximate Cause
Insurance - Death In Violation Of Law-Proximate Cause
Michigan Law Review
Decedent's life was insured by the defendant company, a clause in the by-laws of which, incorporated in the policy by reference, excepted liability where death occurred in consequence of a violation of law. Decedent and two companions had committed the crime of auto banditry, and police officers, with warrants for their arrest, surprised them in possession of the stolen car, killing the decedent who sat armed with a rifle in the rear seat as the car drove away. Held, the policy covered the death of the insured, including additional payment for accidental death. Ben Hur Life Association v. Cox …
Insurance - Civil Death Of Insured As Effecting Acceleration Of Endowment Policy
Insurance - Civil Death Of Insured As Effecting Acceleration Of Endowment Policy
Michigan Law Review
An endowment policy was made payable to insured if he should live to the policy anniversary date next preceding his sixtieth birthday, otherwise to his executors or administrators. Four years after the policy was taken out, insured was sentenced to life imprisonment for killing his wife. A statute provided that the estate of a person incarcerated for life "shall be administered upon and distributed, and his contracts and relations to persons and things are affected, in all respects, as if he were dead." In an action on the policy by the administrator of insured, held, that imprisonment of insured …
The Money Value Of A Man
Michigan Law Review
A Review of THE MONEY VALUE OF A MAN By Louis I. Dublin and Alfred J. Lotka.