Archive for April, 2017

Success Story: Life Settlement Saves the Day

April 18th, 2017 No comments

The life settlement market is clearly much different than it was 10 years ago but it is still alive and well. The target for finding a qualifying policy is much smaller today but the parameters were likely somewhat unrealistic back then anyway.

Settlements still tend to be success-stories-logosomewhat controversial but with a straight face I will say that I cannot understand why. A legitimate, well understood life settlement is arguably the most consumer beneficial concept I have ever been a part of in my history in the life insurance market. The many, many millions of dollars I have been able to secure for clients who otherwise would have lost millions is astounding.

I know where the controversy comes from and it is generally from one of two camps. The first and lesser is simply a moral issue. Is it reasonable to sell a policy on someone’s life so that a third party has financial upside in an individual’s death? When you stop and think about it (and I have) there is a very long list of people and entities which are on the same side of that ledger for many transactions in life which we never second guess.

An obvious one is an insurance company paying out annuity, long term care or disability benefits. Client dying equals financial upside. Very simple. However, we don’t joke about the Italian actuaries in those scenarios.

The second camp is the insurance carriers themselves indoctrinating their agents against the concept. Those which stop with indoctrinating are the less dangerous ones. Many threaten to summarily fire any representative which brings up the idea. Imagine that; firing a producer for bringing a significantly impactful financial concept to a client; a potentially life changing strategy, because there may be a negative effect on your bottom line. I see it in real life. You can imagine what’s going through my mind when I am watching a sporting event and see said insurance carrier spout their flowery, client first rhetoric.

None-the-less, a success story: an advisor introduced an educational institution to me not long ago. The institution owned a million dollar policy on a long time benefactor. Unfortunately the policy was misunderstood and unmanaged and it is dying before the insured individual. In fact, there is no cash value left and they are paying monthly mortality costs to keep it alive.

In the end we managed to find $500,000 for the institution. $500,000! Instead of zero! Yes, that’s real. $500,000 rather than $0. Tell me to my face that isn’t the “right thing to do” and we’ll see how it goes.


This material is for informational purposes only and should not be considered tax or legal advice. Any person needing tax or legal assistance should contact their respective advisors.

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Giving a Life Insurance Policy to Charity

April 11th, 2017 No comments

Over the past number of months I’ve had a handful of cases come across my desk involving life insurance and charity. As is so often the case, some of the transactions ended up as case stud-ies in what to watch out for.

I understand that not everyone is going to have the same attitude regarding the intersection of life insurance and the non-profit sector but I am somewhat surprised at the black and white policies of charitable organizations I encounter at times. Many charities and non-profits have a policy to simply cash out life insurance policies which are donated. I can’t think of a more short sighted stance. Of course each and every transaction should be evaluated on it’s own merits relative to required premiums, guarantees, life expectancy, use of money, etc. It also doesn’t help that so many non-profits have been burned by life insurance over the years the same as so many consumers have. For full post, click here…

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