Archive for the ‘Life Settlements’ Category

Policy Buy Back – Life Settlements

January 27th, 2023 No comments
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Today’s Life Settlement Market

January 18th, 2021 No comments

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Life Insurance Appraisal Brings Confidence to Planning

December 8th, 2020 No comments
Paying for a policy appraisal can have a great return on investment.

Recently, the attorney for a family office asked for my help with a situation. The family wanted to transfer/sell two $10 million survivor life policies to another trust for planning purposes. The policy owner went to the two insurance carriers to ask for the 712 values or Interpolated Terminal Reserve (ITR). Though the two policies had the same death benefit on the same couple issued at the same time for the same kind of policy, the numbers came back very different from the two insurance carriers, each of which is one of the top rated and recognized carriers in the market.

A Difference of Opinion

The cash value of each policy was roughly $1.5 million, and one carrier came back with a number exactly the same as the cash value and even stated on its communication “Please note that ABC Life uses the Net Cash Value as a proxy for the ITR.” The other carrier came back with $3 million.. For full post, click here…

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Life Settlements: Doing the Right Thing Is a ‘Sometimes’ Mantra

August 31st, 2020 No comments
Within the life insurance industry, there is vicious infighting with everyone trying to protect their own turf.

There may be few markets more divisive in the life insurance world than the life settlement market. It’s a bit macabre by nature, but that shouldn’t be held against it; all life insurance is. A given individual may not want to go that route, but that shouldn’t matter for others. It might have a small target market; however, when it works, it can be like a grand slam.

Within the life insurance industry, there is vicious infighting with everyone trying to protect their own turf. Some agents believe it’s a great opportunity, with others saying it should be illegal. Some advisors cringe at the concept and others readily refer clients to

trusted players in the market.

This is something I have never been conflicted about. When done for appropriate reasons and aboveboard, I would move forward all day long. I’ve seen life settlements salvage almost unimaginable amounts of money, millions of dollars in single transactions. On smaller deals, getting 50 grand is better than a poke in the eye. But why the controversy? For full post, click here…

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Don’t Forget the Value of Life Settlements

November 7th, 2019 No comments

Policy owners can benefit greatly from a simple concept

Back in the day, the life settlement market was as crazy as the Wild West. Funders were making insane offers on anything you’d throw in front of them. A dozen years ago, with the financial collapse and significant changes in life expectancy calculations, things changed dramatically, and the market largely dried up.

Fortunately, for policy owners, the market is still alive and well. I’m currently working on a couple of situations in which policy owners have been well served by the existence of a currently thriving life settlement market.

Recent Cases

In one case, a trustee called me because a $2 million trust owned policy was collapsing, and the insured had made the decision to surrender it for its cash value of $85,000. This was a Transamerica policy that was subject to terribly dishonorable tactics. When Transamerica decided it didn’t want to pay death benefits on a certain book of business, it simply jacked up the mortality expenses dramatically even though it didn’t realize adverse mortality experience. This was also a strategy to make the policies less attractive to the life settlement market. For full post, click here…

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Are Life Settlements Back?

February 3rd, 2016 No comments

It’s been a while since I’ve discussed life settlements but, then again, it’s been a while since there has been a lot of activity in the market. The market wasn’t dead; it just seemed that way.

As a reminder, the life settlement industry is a secondary market for existing life insurance policies and it is an outgrowth of the vatical market. A viatical settlement is the sale to a third party of a life insurance policy on the life of a terminally ill individual, defined as someone with less than a 24 month life expectancy. Fundamentally, a life settlement is the sale of a life insurance policy to the secondary market on the life of an individual who isn’t terminally ill. For full post, click here…

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Life Settlement Responsibility

June 19th, 2014 No comments

Earlier this year there was an article in LifeHealthPro about a lawsuit filed by a couple in California regarding their life insurance policy. Evidently they could not afford the premiums on their large life insurance policy and they ended up having to reduce the face amount considerably. The lawsuit against the carrier is due to the fact that the carrier did not inform them of the option of a life settlement.

I also read an article written by Robin Weinberger and Peter Katz for Life Insurance Settlements, Inc. in response to this lawsuit which discussed broader issues and implications and this is what I want to comment on. Read more…

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Taxation of Life Settlements

February 23rd, 2012 No comments

The life settlement market isn’t what it used to be but it’s not dead. We have negotiated a couple of life settlement transactions lately, so I have been reviewing IRS Revenue Rulings pertaining to gain. It’s been almost three years since the IRS provided guidance so I thought this would be a good time for a refresher.

Before these Rulings, Read more…

What’s Up With Life Settlements?

June 24th, 2010 1 comment

After all the activity and fuss regarding life settlements over the past number of years, why isn’t there as much conversation now as there used to be? Where is this market heading? Who should be paying attention?
Read more…

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