Irrevocable life insurance is a cash value policy
Some insurers are propounding irrevocable insurance is out of scope because the policyholder cannot access the assets in any way except upon a mortality benefit. The policyholder cannot monetise the policy by means of surrenders, withdawals, pledges o assignments. The insurer thus opines the policy does not have a cash value an dis therefore not in scope of the CRS as the CRS only includes insurance policies that have a cash value.
The OECD will definitely amend the CRS to incude irrevovable Life Insurance. The OECD regards these policies equivaent to irrevocable trusts. This means the insurer will be obliged to report on the policyholder and payments to beneficiaries.
If the policyholder subsequently receives a penalty for undeclared assets, the policyholder cannot utilise the policy's assets to pay for these fines. Neither can the policyholder repatriate their assets back home to benefit from an amnesty lower taxes.
The policyholder will then likely sue any advisor who recommended the utilization of irrevocable life insurance as a means of maintaining confidentiality.
|2.||Irrevocable life insurance is likely already in scope as the commentary states, notwithstanding the definition of cash value policies, "other benefits" from investment-linked policies are regarded as cash value policies. Although the commentary says this is for indemnity insurance, the examples they give such as personal injury and accident are non indemnity insurance. Life insurance is non-indemnity insurance. Therfore irrevocable life insurance wrappers are regarded as investment-linked insurance, in scope as other benefits from an investment-linked policy. This is explained in my opinion brief.|
|3.||Economist article describing irrevocable insurance as a tax ruse.|
|4.||In any event, notice the reporting obligations of Finnacial Institution as perthe OECD Implementation Handbook...
Information with respect to Other Accounts