Life Settlement

For a while, after the financial crisis, the life settlement market had become non-existent as investors were licking their wounds and life expectancy was discovered to be longer than anticipated in many cases. We have recently completed several cases and are about to wrap up another using a top life settlement brokerage firm that has access to all the registered buyers in a given state. Using an auction process they are able to maximize the offers that your clients receive. Cases that would not have received offers a few years ago are now getting a substantial payout. Recently life expectancy rates have changed, but we are still seeing competitive offers made.

Both recent cases were older males, 89, with UL policies where the cash values were already stripped from their policies and the policies would lapse if a substantial premium was not paid. The insureds involved did not wish to make the premium payment and thus both were perfect opportunities for a life settlement where they could walk away with a substantial amount on policies that would have been allowed to lapse.

In another case we got a substantial settlement for a male in his seventies whose policy had been affected by changing mortality rates imposed by the carrier.

All three cases led to substantial payouts to the insureds and nice commissions for the agents. If you have an elderly client having trouble making premium payments or who no longer has a need for their insurance, and has some health issues that may limit their life expectancy, consider looking into life settlements.

By Allen Bader and Tony Cravitz, CLU