by Derek W. » Mon Oct 06, 2008 06:03 pm
Hello Everyone,
My name is Derek. I am new to this insurance community. I'm here to give and get advice and am looking forward to doing both. I work in the life settlement industry and speak with agents on a daily basis. I would love to gain a better understanding of the agent's point of view and would be more than happy to answer questions regarding the life settlement process. Feel free to message me.
My name is Derek. I am new to this insurance community. I'm here to give and get advice and am looking forward to doing both. I work in the life settlement industry and speak with agents on a daily basis. I would love to gain a better understanding of the agent's point of view and would be more than happy to answer questions regarding the life settlement process. Feel free to message me.
Posted: Thu Oct 16, 2008 09:03 pm Post Subject:
This whole thing puts a bad taste in my mouth...if EVERYONE that is closely related understands and agrees, then ok...my fear (well one of them) is the mental capability of the one giving it up...
Posted: Thu Oct 16, 2008 09:10 pm Post Subject:
Simple way to, at least, help make sure everyone is aware is make it mandatory that both the insured and the "old" beneficiaries sign the "new" life settlement papers.
At least there won't be any surprise and the heirs will have an opportunity to talk about the situation. If is an issue of money, the heirs might be able to help out so there isn't a need for the change.
Posted: Thu Oct 16, 2008 10:58 pm Post Subject:
PERFECT SOLUTION!
Posted: Thu Oct 16, 2008 11:40 pm Post Subject:
Wow that really is a great solution Life....Now maybe you can give the next president a solution on how to fix out economy!!
Posted: Fri Oct 17, 2008 08:37 pm Post Subject: senior life settlements
Well I've been out of the office and haven't been able to check out the forum lately. It seems that there was a lot of discussion while I was gone and a few of you brought up very good points. I'd like one more time make this clear as possible. Please read this carefully.
A life settlement is an option for a client that is looking to surrender their policy or simply let it lapse. Institutional capital has been attracted to this alternative asset class because the purchase of a life insurance policy can provide a client with an excess of 2-3 times their cash-surrender-value build up in the policy while providing the investor with an 10-12% annual rate of return.
The current beneficiary(s) of each policy are required to sign the contracts stating that they are aware and acceptable of the life settlement transaction. If a beneficiary is unwilling to sign the contracts then the life settlement transaction is not possible. The money received in the life settlement can be used in any manner by the seller. The owner of the policy could use the life settlement proceeds to fund a new paid up policy for the previous beneficiary(s). They could also give the money directly to the beneficiary(s), or perhaps invest the settlement money in a better investment vehicle that will yield more money for the future beneficiary(s) down the road.
Milestone was the first life settlement provider to require full-disclosure on all transactions, making each settlement completely transparent. The owner and beneficiary(s) must sign off on the contracts which disclose each agent/broker's commission on the transaction. A life settlement may not be the best scenario for every client, however in many cases it gives the client more money that the insurance carrier is willing to.
We have a solid reputation in our industry and I would love to discuss this in further detail if any agents/brokers have received inquiries about the option of a life settlement from their client(s). With the credit crisis upon us, many senior clients are looking for ANY options as the financial market gets progressively worse.
Posted: Fri Oct 17, 2008 08:41 pm Post Subject:
They could also give the money directly to the beneficiary(s)
We all know the proceeds from Life Insurance is tax free. Would this transaction also be tax free?
Posted: Sat Oct 18, 2008 01:12 am Post Subject:
Well this part makes me feel A LOT better about it...
The current beneficiary(s) of each policy are required to sign the contracts stating that they are aware and acceptable of the life settlement transaction. If a beneficiary is unwilling to sign the contracts then the life settlement transaction is not possible
I wish you'd not call it a commission, it is after all the the full death benefit you're collecting right? :wink:Posted: Sat Oct 18, 2008 12:47 pm Post Subject:
I like that part myself...I guess it at least gives a little protection especially for an ederly person...keeps them from being taken advantage of.
Posted: Mon Oct 20, 2008 01:38 pm Post Subject:
Actually that is not completely correct Lori. We work with institutional funds here. Our investors technically purchase the policy and receive the rest of the death benefit of the policy. However it is not the "full death benefit" because the agent (and broker if one is involved) receive a commission from that death benefit. Our investors then in turn pay Milestone a small portion of the death benefit for our services.
Posted: Mon Oct 20, 2008 02:58 pm Post Subject:
Three typical examples of the characteristics of a Life Settlement Transaction are given below:
Universal Life Insurance
Male Age: 79
Policy Face Amount: $3.5 Million
Cash Value: $185,000
Life Settlement Payment: $970,000
Universal Life Insurance
Female Age: 86
Policy Face Amount: $1 Million
Cash Value: $45,000
Life Settlement Payment: $547,000
Whole Life Insurance
Male Age: 75
Policy Face Amount: $1.5 Million
Cash Value: $72,000
Life Settlement Payment: $455,000
Just some examples of how these life settlements payout. To me the investor would really be making some money once the person dies. Sure the cash value for someone cashing out there own policy to a life settlement may be appealing to whoever has the policy but in the long run who really makes out?
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