This past summer, the firm of Pluris Valuation Advisors LLC released a detailed white paper on the valuation of life insurance. According to the authors, when valuing life insurance or life insurance-linked instruments such as split-dollar collateral assignment receivables or split-dollar promissory notes, there are only three elements of Fair Market Value. These include:
- Illustrations from the insurance company projecting expenses, premiums and cash values
- The mortality rates applicable to the insured life as of the valuation date
- The discount rates applicable to the cash flows from the policy as of any given year.
The full report, Life Insurance: Mortality and Discount Rates can be viewed through the link below.
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