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.
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