Life Insurance

Variable Universal Life

What is a Variable Universal Life policy?

Variable Universal Life (VUL) is a versatile product, which provides both insurance protection and investment components. VUL, like universal life insurance, allows you the flexibility to choose the amount and timing of your premiums, subject to IRS maximums. Likewise, you may increase or decrease the death benefit, depending on policy minimums and any underwriting requirements. A variable universal life policy minimizes tax liability, by allowing tax-deferred growth of assets, tax-free policy loans, and payment of the death benefit on a stepped-up basis. Most importantly, a VUL policy allows you to select investments that are best suited to your investment goals. The value of the policy will then vary based on the actual performance of the investments as opposed to a predetermined rate.

Advantages of a Citadel VUL

Tax Benefits For as long as there have been income tax laws in the U.S., insurance products have enjoyed favorable treatment. If properly structured and managed, the assets inside a life insurance policy benefit from tax-free accumulation of investment gains, income from the policy in the form of a tax-free loan over the life of the policy. At the time of death, the death benefit receives a stepped-up basis for tax purposes, which means the death benefit can be passed on to the insured’s estate tax-free.

Asset Protection Citadel life policies written under Anguillan law have an inherent level of asset protection because, in most cases, the policy cannot be attached by creditors. In addition, in some states, the assets of life policies cannot be included in bankruptcy judgments and cannot be seized by U.S. courts.

Confidentiality Many foreign jurisdictions, including Anguilla, require that insurance policies be held in strict confidence. Exceptions may apply with respect to disclosure of tax information, including provisions under tax treaties with the U.S.

Immediate Low-cost Loans While domestic carriers typically restrict loans for the first few years and/or offer loans at a higher interest cost, with a Citadel life policy, distributions in the form of a loan or return of basis may be taken tax-free from the first day forward.

Investment Options Unlike most domestic carriers, Citadel does not limit its investments to a group of company owned funds, but rather offers the policy owner the chance to invest in public and private stocks, public and private funds, real estate and intellectual properties, virtually anywhere in the world. This feature gives tremendous flexibility through a wide range of investment options.

Citadel offers three unique investment strategies, making its policies so flexible they rival any other U.S. Treasury Department and Internal Revenue Code compliant life policy offered by other companies around the world.

Preferred
Policy owners may select from several Preferred accounts with various maturities. The Preferred investment strategy allows the policy owner to select a low cost investment option where funds are secured by a diversified portfolio of U.S. Treasury notes and bonds, public and private stocks, corporate bonds and money market instruments.

Select
Through its mutual fund administrators, Citadel offers some of the finest international investment products available anywhere. Citadel provides a group of funds and fund managers with their own specific investment objective and investment policy.

Choice
Through the Choice option, policy owners may recommend any experienced money manager in the world provided that the manager meets Citadel's high standards. The insured may submit the name of the preferred money manager. Citadel will then conduct extensive due diligence. If warranted, Citadel will approve the money manager and make the manager available to Citadel policy owners.

As an additional option under the Choice selection, policy owners may make a portion of their premium payments with "in-kind" or non-cash assets including existing stock and bond portfolios, real property, intellectual properties, as well as other non-liquid assets.

Citadel shall have no responsibility or liability for any losses to the Investment Account. Citadel Insurance Company, Ltd. shall deduct the cost of investment advisory or management fees from the Investment Account.

Segregated Accounts As an international insurance company under the laws of Anguilla, Citadel life policies enjoy the benefit of segregated account legislation. This means, by law, the investment portion of a life policy is held separately from the assets of the insurance company and the insurance company’s other clients. Assets are not commingled and are therefore not at risk should a creditor attempt to attach the funds of another client or the insurance company.

Reduced Premium Taxes As an international insurance company, Citadel policy owners pay no state premium. In some states, premium taxes can be as high as five percent (5%) on domestic life policies.

Normally, international life insurance policies issued to U.S. taxpayers are subject to a one percent (1%) federal excise tax. However, because Citadel elects to be treated as a U.S. domestic company under IRC 953(d), Citadel life policy owners are not subject to excise tax.

Other Savings There are several ways that Citadel operates in a more cost effective manner than domestic carriers. By choosing to not to do business in the U.S., Citadel is not subject to the high cost of corporate income tax or the regulatory burden imposed by each of the 50 states different insurance laws and regulations. Citadel runs an efficient, cost effective operation that is dedicated to serving its clients.

U.S. Treasury Department and Internal Revenue Code Compliant Citadel provides unique insurance structures tailored to the individual client.  These structures are reviewed annually by outside U.S. legal counsel to ensure that all policies and structures adhere strictly to all applicable Internal Revenue Code sections, modifications in the code, and Revenue Rulings. Citadel clients can rest easily knowing that they can enjoy the benefits of international planning while investing in U.S. compliant products.

Anti-Money Laundering Citadel strives to be a leader in complying with all "Anti-Money Laundering" laws, "Know Your Customer" requirements, PATRIOT Act rules, and Caribbean Financial Task Force initiatives.

Security In some U.S. states, the assets of life policies or annuities cannot be included in bankruptcy judgments and cannot be seized by U.S. courts.

Life insurance is often used to provide security for the family and estate of the insured. Upon the death of the insured, proceeds are available to fund such things as income replacement, debt retirement, buy-sell agreements, and estate tax payments.

Citadel uses only the strongest and highest rated reinsurance companies in the world to back its life insurance policies. This provides the strength, stability and peace of mind sophisticated investors demand when considering the preservation and growth of their wealth.

Citadel Insurance Company, Ltd.
P.O. Box 1162, The Valley
Anguilla, British West Indies
Phone: (264) 497-0147
Fax: (264) 497-2059
clientserv@citadelins.com