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Joseph Kashou February 06, 2019

The Supply-Side Perspective Of Life Settlements


Millions of Americans own life insurance policies. Just like the things that people no longer need or want that they put up for bid on eBay, life insurance can become one of those things that you can turn into cash if you know how to do it. Few people do.

What's truly astonishing is that lots of people just throw their life insurance away. Every year, hundreds of thousands of life insurance policies worth billions of dollars are discarded like an old broken down piece of furniture taking up space in your basement. Your life insurance policy may be worth a ton of dough.

So how did the life settlement industry come about and why haven't you ever heard of it? Well, as I said before, it is an inefficient market and it's been a very well-kept secret that the life insurance carriers would rather you not know about.

Life insurance is a very, very large industry that plays a vital role in helping people and families insure against the financial loss of a loved one, a key employee, and all kinds of potential financial risks that people suffer from an unfortunate and untimely exit from this world.

But over the course of time, things change. Some of the reasons why someone bought a life insurance policy may no longer exist. Children grow up and lead successful lives, businesses get sold, premiums strain budgets and so on.

The problem is that the insurance companies have always had a power hold over their insureds by limiting their options if they decide their coverage no longer meets their needs.

Until the life settlement industry came along, you only had two choices: Surrender your policy to the carrier for a non-negotiable price or stop paying premiums, lapse your policy and lose everything. Folks just don't know there's a third option.

A life settlement transaction is where an insured, typically a senior aged 65 or older, turns to a Life Settlement Provider for help. A Provider is licensed by the individual states to work with insureds and their representatives to maximize the value of their life insurance policies.

In a senior life settlement sale, the Provider will price the policy and solicit bids from multiple purchasers to assure the seller has the best chance to maximize the value of their policy. The life settlement trade makes a market above the carriers' surrender offer but less than the face amount of the policy.

If you are a senior with an unneeded/unwanted policy, an Advisor with senior clients, or an Insurance Agent losing your book to high lapse and surrender rates, LifeTrust would like to talk to you.

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