Life Settlement policies can be sold by the aging insurer to a third party/investor who receives benefits of the policy after the death of the policyholder. The buyer becomes responsible for the premiums and liabilities of the policy after purchase.
One qualifies to sell their policy if over 55 and/or if terminally ill. Brokers will shop providers to gain the highest return for the policy. Upon surrendering one’s life insurance policy for a lump sum, the buyer benefits from the remainder of the policy.
Transactions are fairly technical in how the sum to be dispersed is determined based on:
- age of policy holder
- disease diagnosis if any
- terms of the policy
- amount of the policy
- extenuating circumstances surround a prognosis of potential health risk
- risks surrounding a job if the policy holder is still working
Services
Life Settlements policies are considered an asset, and are used as professional financial tools by both the investors and the policy holders. A well planned life settlement policy can help seniors in their retirement years.
Specialization
On April 29, 2009, the United States Senate Special Committee on Aging conducted a study and came to the conclusion that life settlements, on average, yield 8x more than the cash surrender value offered by life insurance companies
Determine if the Life Settlement company is a member of the Life Insurance Settlement Association (LISA). This organization is the industry standard bearer that sets policies and has high ethical standards for all industry participants. Members of LISA must adhere to a strict code of conduct.
Preparation
Life Settlements are not simple transactions and they require professional expertise to deal with them successfully. Choose a professional who can make a strong case for your policy, and negotiate with the pool of investors.
- All senior citizens, which are minimum 55 years of age can apply.
- Policy face value amount should be higher then $50,000.
- A policy that has been active for at least two years and has low cash surrender value with premium rate lower then 8% annually.
- Understand the full financial picture of your parent, and how this instruments works to their benefit.
- Your parent must be of “sound mind” to sell their policy; or the transaction must be done by a designated Financial Power of Attorney.
Evaluation:
- How much experience do you have?
- How many policies have you written?
- If going through a Lawyer or CPA, find out if they are working through a broker or provider.
- Are you a member of LISA? What additional affiliations do you have?
- Do you have client testimonials? (Likely because financial transactions are confidential, it is acceptable that “references” will not be available, but testimonials should be.)
- Will you work with my existing CPA, investment advisor, financial planner or attorney?
Life Settlement Radio Show Segments
- Sell Your Life Insurance Policy, See What You Can Do With It
Hear some examples from Rob Haynie of what people have done with the proceeds from selling their life insurance policy. Rob joins Suzanne Newman on the Answers for Elders Radio Show. Rob serves on the Board of Directors of the Life Insurance Settlement Association (LISA) and is a charter member of the Association’s PPC committee, which is charged with the regulatory and legislative activities of the industry. The Managing Director of Life Insurance Settlements, Inc., he has been proactively in the industry for more than 31 years.
Rob describes a family who had been donating money to a ballet center, but were running low on funds around 2008. “The money that would be going to the 501c3 [the ballet center] was not going to go to them, because they were going to lapse the policy. So they were losing money. Their financial planners said, ‘What about a life settlement?’ He said, ‘What are you talking about?’ They said, ‘We’re going to sell the policy.’
“Two things happened. They immediately donated the money, what they got, to the 501c3, who was able to take it tax free. But the key thing was, the donors, he and she were both alive, were able to write off the donation while they were alive. And they also were able to go to the ballet center and see their name above the doors as you walked in for a number of years, before they passed away.”
Rob adds, “Your life insurance policy is like any other assets you own. It’s yours. You can do with it as you please. You can find out what it’s worth – exactly what it’s worth, today – by going through a process, a free non-binding appraisal, and then at that point you will have a decision to make as to what’s best for you. And you can sell some of your life insurance policies. We can split a policy in half. You can sell half, and keep half. But at the end of the day, we just want you know there are options.”
Email Rob Haynie at [email protected], call his cell phone at 954-599-4433, or learn more at the LI Settlements website.
Check out our affiliate podcast Alzheimer’s Speaks.
- No Catch: You Really Can Sell Your Life Insurance Policy
Rob Haynie joins Suzanne Newman on the Answers for Elders Radio Show to talk about selling your life insurance policy for cash. Rob serves on the Board of Directors of the Life Insurance Settlement Association (LISA) and is a charter member of the Association’s PPC committee, which is charged with the regulatory and legislative activities of the industry. The Managing Director of Life Insurance Settlements, Inc., he has been proactively in the industry for more than 31 years.
Suzanne asks, “What are people most confused about with life settlement?” Rob answers, “That they don’t understand that, they think there’s a catch, they’re missing something.
“It isn’t too good to be true. It’s a life insurance policy. You own it. You can do whatever you want with it. And if you can get more money then you can from the carrier, you have every right to get it.”
Email Rob Haynie at [email protected], call his cell phone at 954-599-4433, or learn more at the LI Settlements website.
Check out our affiliate podcast Alzheimer’s Speaks.
- Sell Your Life Insurance Policy, Invest the Proceeds
Believe it or not, you don’t have to be sick to sell your life insurance policy. You can sell it and repurpose the proceeds in a life settlement. Rob Haynie joins Suzanne Newman on the Answers for Elders Radio Show to talk about how Life Settlements work. Rob is the Managing Director of Life Insurance Settlements, Inc. and serves on the Board of Directors of the Life Insurance Settlement Association (LISA). He has been proactively in the industry for more than 31 years.
Rob says, “Life insurance policies are not designed to pay a death claim. They are priced to know they’re going to lapse. You don’t have to be sick to sell your life insurance, it’s just another misnomer in our industry.
“I’ve been saying it for 30 years: we’re putting the life back in life insurance… We are helping people with life expectancies exceeding 20 years to sell their policies. I sit on the board of LISA [Life Insurance Settlement Association], and I was told the other day we do a market data collection study every year. On average, when you talk about things you could do with the settlement money versus not having so much money, we determined that the typical seller gets 5.2 times to as much as 7.8 times. This is on average. So if you were about to give up your policy for $100,000, and now you’re going to get make it up $500,000, that’s a big difference…
“There’s a lot of fear about Social Security. A lot of people are living on Social Security right now. So the idea of knowing that this is a resource, it eliminates a lot of that uncomfortableness, knowing that they’re going to be okay no matter what happens.”
Email Rob Haynie at [email protected], call his cell phone at 954-599-4433, or learn more at the LI Settlements website.
Check out our affiliate podcast Alzheimer’s Speaks.
- You Can Repurpose Your Life Insurance
Rob Haynie, Managing Director of Life Insurance Settlements, Inc., joins Suzanne Newman on the Answers for Elders Radio Show to talk about Life Settlements: selling your life insurance policy and repurposing the proceeds. Rob serves on the Board of Directors of the Life Insurance Settlement Association (LISA) and is a charter member of the Association’s PPC committee, which is charged with the regulatory and legislative activities of the industry. He has been proactively in the industry for more than 31 years.
Rob explains, “A life settlement is the sale of an existing life insurance policy to a third party – we’ll call that person an investor – and for money that is greater than the cash surrender value, or certainly in the case of lapsing, but less than the death benefit. And it’s all based upon someone’s life expectancy and the cost of insurance going forward from that. They might have been 45 years old when they bought it and they had a whole list of reasons down on a pad of paper… [Maybe there’s been] some chaos in the financial sector of the person’s household. Most people will lapse the life insurance policy, or surrender it for the cash, because that’s the only thing they know to do. The insurance company is certainly not going to tell them they could [sell it].
“You can sell your life insurance policy. We’ve always kidded the life insurance industry, saying, ‘You should be telling people they can sell the life insurance policy because they could turn around, take the proceeds and buy something else you offer, as opposed to letting it lapse or surrender.’
“They can take the proceeds from the settlement, and we use the word repurpose that, and buy something that fits their current needs, such as an annuity. So instead of paying money, they’re getting money every month off of an asset they didn’t know had any value.”
Email Rob Haynie at [email protected], call his cell phone at 954-599-4433 or learn more at the LI Settlements website.
Check out our affiliate podcast Alzheimer’s Speaks.
