Posts Tagged ‘life settlement’
Wednesday, November 17th, 2010
These days majority of the population choose to get life insurance so that their family will get insurance cover when they are no longer alive. So many people have been doing this for some time but what they do not realize is that they can actually get money before they die. This is done through life settlements which means that you can sell your policy to someone else.
Life settlements offer more than the surrender amount but less than the death benefit the covered person should be getting. This is beneficial for both sides because the buyer simply gets a good investment chance and the person selling their cover can get some cash instantly.
Although this industry had a big boom when diseases such as AIDs emerged reducing the life expectancy of many, nowadays even such patients have longer life expectancies extending up to twenty years. This makes investment in life insurance settlements a neccesitate a longer term investment horizon.
In other words this shows that one is should have some strategies before investing. The main point to consider is therefore the expected life time of the seller. Those who have a long expected life time will have a cheaper cost and it is always important to note that one should be factoring in new technologies since this could be a way of increasing the life expectancy.
Other steps include working strictly with brokers who represent the seller. This helps in reducing conflicts of interest. You should also discuss with your agents on what policies you are interested in putting your money in. You should also invest in policies from A-rated companies to ensure that you actually get paid when the seller dies.
The last strategy is to ensure you buy only policies which are at least two years old. This will eliminate the possibility of falling for scams. It is also a big step in ensuring that the insurance companies actually pay. This way you can be assured of benefiting from life settlements investment
Want to find out more about life settlements, then visit the leading life settlement forum to hear what others are saying.
Tags: affordable life insurance, business, finance, insurance, Investing, life insurance, life settlement, life settlements
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Tuesday, November 16th, 2010
Life settlement investments have gained popularity over the past few years. It is an opportunity for two parties, the person that has the life insurance policy and the person, or business, which purchases the policy from that person. This is a viable option for both parties to get benefit from doing this.
Life insurance policies have been popular for many years and a lot of people carry active policies. There are some individuals that have come across difficult financial times and are unable to still pay their monthly premium. There are groups that will purchase that policy from the policy holder for a price between the face and cash values of it.
Someone with a life insurance policy is the first portion of this investment. There may be many reasons that someone will need money but selling their policy can help them with that. Their policy will be purchase at a point somewhere between what the policy pays at the time of death and the present cash value of it. The price point takes many factors into consideration but, mostly, their life expectancy.
The next group involved in this investment is the life settlement provider. The provider is the entity that purchases the policy from the individual insured. They normally purchase many policies to balance them over time. Many states require that the purchaser of the insurance policy be a licensed provider in their state.
A person or group that is involved in the process between the provider and someone insured is called a broker. The broker is much like a real estate agent as they will match the two parties up based on what each has to offer. Brokers are required to be licensed in certain states to conduct this type of transaction.
The individual that has the money to invest in the transaction is the life settlement investor. The investor will either be the provider or work with the provider. There will be a contract involved between the provider and investor outlining the price and specific policy.
A group or individual that purchases life insurance policies from someone are purchasing life settlement investments. This type of transaction gives both parties the chance to make money on the deal. An individual with the policy may wish to sell their policy for many reasons but it can help pay any bills or fund other endeavors.
Looking to find the best information on life settlement investments , then visit http://www.amritafinancial.com/life-settlement-investments to find the best advice on investing in life settlements.
Tags: affordable life insurance, finance, insurance, Investing, life insurance, life settlement, life settlements, retirement
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Wednesday, October 27th, 2010
An article by Lance Wallach appeared on the Gerson Lehrman Group website claiming the life settlement industry would die within two years. His comments set the life settlement forums, blogging community and pundits into a frenzy. While Wallach made a number of accurate observations, the pessimistic conclusion drawn for the life settlement industry is built on faulty logic at best.
Wallach reasoned that because the past couple of years had seen low offers and lack of bids for policies in the secondary life insurance market that “the future of the life settlement market is dim”. However, the conditions that dragged on the life settlement market during the past two years are not likely to persist into the future. A lack of liquidity from institutional investors that feed capital into the life settlement market was the number one drag on valuations and offers. Quite simply the money used to buy policies was limited because investors had few credit facilities and limited capital available to deploy. This was not something inherently wrong with the life settlement market, rather it was an inevitable reality of the broader capital markets.
Wallach added “I think that the life settlement market will not have any future source of funds within two years.” This is clearly not the case. As financial institutions resume more normal liquidity levels and credit facilities again become available the demand in the life settlement market will consequently increase. The life settlement recovery is already underway in 2010 with more providers regaining funding and become active in the marketplace. At the end of the day, the hedge fund managers, private equity executives and investment bank traders must deploy their capital where they get the best returns. Many life settlement investors are now buying with 19% target IRR’s. Those kinds of returns are hard to ignore as an investment manager.
Another pillar of Wallach’s argument against the continued health of the life settlement industry is the proliferation of life settlement legislation. While life settlements are now regulated in 40 states and consequently the cost of doing business has increased for life settlement brokers and providers, the net effect isn’t all bad. In fact, a handful of states, and new NCOIL model act language now being considered, require life insurance carriers to notify policy owners that life settlements are an option when they are going to surrender or allow a policy to lapse. That can only be viewed as a positive signal for the longevity of the life settlement market.
The life settlement industry certainly has suffered along with the rest of the world over the past two years. But those difficulties should not be perceived as an indication of the long term strength of the secondary life insurance market. As a consumer friendly transaction, life settlements are enjoying continued protection by legislators and increased attention by investors seeking healthy returns. Those two things alone should ensure life settlements have a place for years to come.
Looking to find the best information from a life settlement broker, then visit technorati for the latest life insurance market commentary.
Tags: affordable life insurance, finance, Financial Planning, insurance, life insurance, life settlement, life settlement broker, life settlements
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Wednesday, September 22nd, 2010
Life settlements have become life saviors for some individuals and families. When a person gives up the rights to their insurance policy to a broker, they are paid a certain amount on the policy. The amount is a percentage of the policy’s worth. This money is meant to provide for that person prior to their death. Upon death, the insurance policy is turned in by the buyer, who collects the full amount.
Prior to this option, the original policyholder could turn it back in to the insurer for a small financial reward or allow it to lapse. Either way, they would receive little to nothing in return. A policyholder may want to rid themselves the burden due to premium costs, the death of the original beneficiary, or they may not need the policy in some for numerous reasons.
Selling off your settlement is not easy. There is money to be made, but there are also broker fees to be considered before the policy is sold.
The companies that consider these policies are often looking to certain candidates. This usually means an older, retired adult. There is quite a bit of difference in investing a policy for a 35 year old compared to someone who is 65 years of age.
The disadvantage to selling of a policy is one is left with nothing to protect their family in the event of death. Also, with people living longer lives, the amount paid by the insurance company may not cover expenses for the rest of that person’s life. This creates a vulnerability that is even harder to overcome for an older person.
Both parties benefit from life settlements. People who no longer wants to pay for policies have the right to sell them off at a fraction higher than what the insurance companies would offer and are no longer responsible for the costs associated with carrying them. The investor is banking on reaping back what they have paid out and then some upon the passing of the original policyholder.
Want to find out more about life settlements, then visit Kelly Ramirez’s site on how to choose the best life settlement broker for your needs.
Tags: affordable life insurance, business, financial services, insurance, life insurance, life settlement, life settlements, Money, retirement
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Thursday, September 16th, 2010
Life settlements are basically when an elderly person who has shortened life expectancy sells their life insurance policy. Usually, their insurance is purchased by an investor that has no other connection to the insured or policy owner.
Instead of the monthly or annual payments most people expect out of life insurance purchased at a young age, the third party pays the holder of the policy a lump sum and therefore becomes the responsible party of the liabilities and premiums required of the insurance policy. This tool is used professionally when an otherwise discarded or ignored asset is sold.
A big benefit for the senior citizen who surrenders his policy through life settlements is that he will be able to enjoy the amount that he receives out of it. This means that he can pay off debts as well as enjoy a comfortable retirement until the end of his days.
Life insurance policies mostly are liquid from between 20 to 60 percent, depending on the insurer. However, many senior citizens are offered higher amounts through life settlements which they opt for so that they can get more out of every dollar they invested throughout their younger years.
This means, that the benefits to the investor, or third party, are high, especially since the settlement policy’s face value is extremely high and can give a better return on investments for the investor. Considering the fact that the third party only pays the policy holder the surrender value of the policy, once that person passes, the investor benefits from the whole amount the policy is worth.
A disadvantage that policy holders might experience is becoming victims to settlement brokers who will take advantage of the situation and offer extremely low amounts on the lump sum. Seniors who may fall victims to this are those are not aware of the liquid values of their policies, or those who have not done the proper research about legitimate brokers.
These kinds of insurance policies are a great way for senior citizens to be able to enjoy the money they saved in investing in their life insurance policies. It may be advisable, however, if the elderly were to ask for assistance in the life settlements to prevent themselves from being scammed by individuals who jump at the chance to make the transaction at a low lump sum to the policy holder.
Want to find out more about life settlements, then visit Kelly Ramirez’s site on how to choose the best life settlement broker for your needs.
Tags: affordable life insurance, finance, financial services, insurance, life insurance, life settlement, life settlements, Money, reitrement
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Wednesday, August 18th, 2010
Life settlements refer to sales of life insurance policies when they are not wanted. Often, it is the elderly that make use of this kind of transaction. It is usually done when the policy can be sold to an investor for more than the cash value that the insurance company would offer.
There are a variety of reasons why a person might take advantage of this. In some cases, the policy is no longer needed. In other cases, the state of the person’s health has declined so that the policy is worth more as a life settlement than if it were surrendered. In other cases, the policy might not be performing well or the person may not be able to pay for it any longer.
The amount of cash that a person will get from the settlement will typically be more than the surrender value but less than their beneficiary would receive at death. The company making the settlement will take over the premium payments and the company will then benefit when the insured is deceased.
Often times, a life settlement is chosen because the cash is necessary now for some reason. It may also be considered when needs change due to death or divorce. If the original beneficiary upon death was a spouse, for example, who is now dead or has been divorced, cash today might be preferable.
Life settlement brokers often negotiate the life settlement transaction for policy owners. There are many different considerations that go into determining how much one will be paid. Therefore, it is important to sit down and discuss the options with more than one life settlement company to get the best offer possible.
Life settlements can be a welcome alternative for getting cash out of an insurance policy that is not wanted. This should be compared to other options such as taking out a loan against the policy. It is possible that you may have to pay taxes on the proceeds. It’s advisable to discuss the transaction with both a lawyer and a tax adviser making the commitment.
Learn more about life settlements. Stop by Kelly Ramirez’s site where you can find out all about what a life settlement broker can do for you.
Tags: affordable life insurance, finance, Financial Planning, insurance, life insurance, life settlement, life settlements
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Wednesday, June 30th, 2010
Most Americans are still unfamiliar with life settlements. For those that have heard of the practice of selling an existing life insurance policy, there are a number of common misconceptions about the relatively new transaction. These misunderstandings too often bias or prevent people from exploring the option that could potentially offer a great financial benefit.
Life insurance policies were originally purchased as viaticals from AIDS and other terminally ill patients in the 1980′s and 1990′s. However, the majority of life settlements now involve healthy seniors. Purchasers do not require or even target ill insureds. Insureds need not be in poor health to have a life insurance policy qualify for a life settlement transaction.
When someone buys a new life insurance policy, quite often a medical exam is required. However, when selling an existing policy in a life settlement no medical exam or doctor visit is required. A life settlement broker will request the existing medical records from the insured’s physician and then forward to an independent actuary for review. Those reviews are used by potential buyers to formulate their purchase offers.
Many people assume that a life insurance policy must have extensive cash value in order to qualify for a life settlement. The opposite is actually true. While cash value in some policies can be used by buyers to pay future premiums, it also presents an obstacle for purchasers. A life settlement offer must exceed the cash value of a policy or the seller will not be sufficiently motivated to participate in a life settlement. Therefore, policies with too much cash value will be too expensive for potential purchasers.
While life settlements are still foreign to many Americans, the industry is growing in popularity and notoriety. Eliminating the confusion that exists in the marketplace will help seniors unlock the potential windfall many don’t realize they have in their own life insurance policies. The first step is to find a good life settlement broker to assist with the process and then evaluate the offers that are presented.
Want to find out more about a life settlement, then visit The Life Settlement Monitor blog.
Tags: affordable life insurance, finance, insurance, life insurance, life settlement, personal finance, retirement
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Friday, June 4th, 2010
As experts debate the likelihood of a double dip recession affecting the global economy, the life settlement industry in the United States is showing some signs of recovery. Over the past two and half years the secondary market for life insurance faced very difficult times. However some indicators are now pointing to a strengthening life settlement market.
Up until recently, many providers have been unable to buy policies because of a lack of funding. That is beginning to change as some are anecdotally now giving bullish feedback. Providers are once again getting funding and starting to purchase policies on the secondary market. Several providers have reported at least one, if not multiple, new funding sources. This has prompted additional communication with life settlement brokers from providers in search of policies to purchase.
The Amrita Life Settlement Index reported a steep gain in April based on increased buying activities by life settlement providers. Most noticeable was a sharp increase in the amount of bids being submitted for life insurance policies on the secondary market. The increased competition suggests a strengthening market overall. A stronger, more competitive market will benefit sellers with higher sales prices.
May believed European investors and financial institutions would be the savior of the US life settlement market in 2010. A Life Insurance Settlement Association sponsored trade mission to Europe made many assume that Europe would be the next great source of investment money for the US life settlement industry. The recent sovereign debt crisis has put a huge burden on European investment banks and financial institutions. Much like in earlier parts of the “Great recession”, when American financial institutions were concerned about liquidity and didn’t readily deploy capital to longer term investments, the PIIGS crisis is weighing heavily on European institutions and investors.
Although Europe may not be the savior of the American life settlement industry, we may not need them. Small but important signs are pointing to a recovery that is already underway. Life settlement providers have money and are actually buying policies. Compared to the troubling time of the recent past, this is a welcome change in anyone’s book.
Want to find out more about a life insurance settlement, then visit Kelly Ramirez’s site at www.AmritaFinancial.com.
Tags: affordable life insurance, business, finance, insurance, life insurance, life settlement, retirement, viatical
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Friday, May 21st, 2010
When considering the sale of your life insurance policy in a life settlement, a life settlement broker is an invaluable resource. Using a professional life settlement broker can have a profound impact on one’s ability to maximize the value during the sale of their life insurance policy. They have access to multiple funding sources, many of which don’t deal directly with the public. In addition, good life settlement brokers can speed up the life settlement transaction by efficiently navigating the long and sometimes confusing process.
The life settlement industry is still in its infancy. As a result, new life settlement companies and life settlement brokers have emerged to fill the growing demand. Although, the quality of life settlement brokers across the industry is somewhat inconsistent. Some are extremely professional, while others are inexperienced and lack the expertise to maximize policy values in life settlements.
Life settlement brokers should be full time dedicated life settlement professionals, not salespeople representing multiple services and products. By concentrating on just life settlements, a life settlement broker removes any potential conflict of interest caused by the opportunity to sell additional products. In addition, dedicated life settlement brokers are more likely to stay abreast of industry best practices and follow the highest ethical guidelines.
It is very important that life settlement brokers work with a number of different potential buyers. By doing so, they ensure that a policy will receive maximum value and consideration during a sale. The more potential buyers, the more likely the seller will get the full market price in a life settlement. Unfortunately, some life settlement brokers only work with one or two buyers which limits the potential for a senior’s policy.
Licensing as a life settlement broker is of the utmost importance. Almost all states now have laws requiring life settlement brokers to be licensed and regulated. By using a licensed life settlement broker, the policy seller can be comfortable that their representative has met some minimum requirements related to compliance, training and education.
Entering into a life settlement to sell your insurance policy is an important decision. Selecting a good life settlement broker is a huge aspect of that decision. They are obligated as fiduciaries and you must believe that your chosen representative can represent your best interests.
Learn more about choosing a life settlement broker. Stop by Kelly Ramirez’s site where you can find out all about selecting life settlement companies.
Tags: affordable life insurance, financial services, insurance, life insurance, life settlement
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Monday, April 26th, 2010
Financial planners and retirees are starting to embrace life settlements as a tool to generate income for seniors. Determining the value of a life insurance policy before starting a life settlement is an important first step in selling one’s life insurance. The value of a life insurance policy is affected by a numerous factors relating to the insured, policy and policy owner among other things.
The personal information of the insured is one of the most important factors in determining a life insurance policy’s value. Obviously the shorter the insured’s life expectancy, the more the valuable the policy becomes. The insured’s age, overall health, sex and even family history play a role in valuing a policy. These characteristics are evaluated by potential buyers and independent medical appraisers to project a life expectancy.
A policy’s value on the secondary market is also affected by the specific type of insurance policy it is. Whole life, Universal life and convertible term policies are commonly sold in life settlement transactions. While convertible term policies have a negligible market due to their risk of the term expiring before the policy matures. Often Universal life policies are the most valuable since they sometimes have accumulated cash value that can be used to pay premiums and the ongoing premium obligations are flexible.
Another important factor in valuing a life insurance policy are the owners themselves. If the owner has a divorce or bankruptcy on their record, some buyers may fear the policy will be claimed by a creditor or former spouse. The owner’s state of residence also affects a life insurance policy’s value. Since states regulate the secondary market of life insurance, some states are more restrictive than others about the transaction and investment aspect of a life settlement. The competitive environment that results affects the offers that buyers ultimately make to policy sellers.
Something that many people don’t consider as part of the life settlement appraisal process is the overall condition of the life settlement market. Although life settlements are an uncorrelated asset class, the industry is very much affected by economic conditions. The purchasers of life insurance policies on the secondary market are financial institutions. The ability of these organizations to purchase policies depends upon rates or return in other asset classes, liquidity and even current public opinion.
Policy owners that understand the factors contributing the value of their life insurance policy are more apt to maximize their asset’s value. By recognizing what makes a policy attractive and valuable they can better plan if and when to sell their life insurance.
Learn more about a life settlement. Stop by Kelly Ramirez’s site where you can find out the value of your life insurance policy with a life settlement appraisal.
Tags: affordable life insurance, financial services, insurance, life insurance, life settlement, life settlement appraisal, retirement
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