The reverse side of the flexibility coin is the extraordinary
degree of abuse possible by all parties concerned. The great
strength of life insurance, it's flexibility, is at the same
time it's great weakness. Policyholders have abused the
structures by putting silly assets into the policies, for example
one Client who "wrapped" his yacht in a policy. Clients
who have "wrapped" their art collections is another.
Anecdotal evidence suggests that some brokers have misinformed
Clients as to the advantages, at times telling Clients outright
nonsense to get the business. Moreover, there is evidence that
brokers and other intermediaries have helped set up structures that
make no sense in the context of the Client to get the commissions.
Some brokers have allegedly negotiated additional kickbacks from
asset managers based on a percentage of the value of the underlying
policy assets in return for bringing the business. Some insurance
companies have allegedly gone along with the
