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: Mon Oct 20, 2008 04:48 pm Post Subject:
In the long run ALL PARTIES involved make out. The client who was going to take the cash surrender value is offered (as you have conveniently pointed out for me) a lump sum payment that far exceeds the cash surrender value offered by the insurance carrier. This provides the client with the money they need now. The investor will receive the death benefit as a return on the monthly premiums they uphold. The seller's representatives are able to take a commission out of the gross purchase price for their efforts, which will be disclosed on the contracts that the seller and beneficiaries sign. The life settlement provider then receives a set transaction fee from the investor, which is also disclosed in the transaction making all parties commission transparent.
The client, their representatives, the life settlement provider, and the investors ALL make out.
Let's use the first example that you provided us. So a client has a $3.5 million UL policy, but can no longer afford to pay their premiums. Once again, they can....
A.) let it lapse and receive nothing.
B.) take the cash surrender value of $185,000.
C.) take the life settlement payment of $970,000.
Keeping in mind your fiduciary duty to do what is best for your client, What would you recommend they do?
Posted: Tue Oct 21, 2008 01:03 am Post Subject:
What would you recommend they do?
Tell them to have a meeting with their loved ones, see if they can pay the premiums until the owner dies, and they collect the benefit...if the owner needs cash depending on how much if the family can't or doesn't want to help out then I'd be for the life settlement offer.Posted: Tue Oct 21, 2008 01:53 am Post Subject:
Derek forgot:
D. Take C and the Life Settlement company makes 2.53 million dollars.
I'm sith you Lori - let the family pay the premiums. Insurance companyies don't care where the check comes from.
Posted: Tue Oct 21, 2008 10:47 am Post Subject:
Thank you...my point exactly....
Posted: Wed Oct 22, 2008 01:28 pm Post Subject: Keyword is option
I agree with you guys as well. I mean...if they family members can afford to continue the premiums that would definitely be in the best interest of the insured and their loved ones to take that route. I think anybody with common sense would figure to attempt that before they explore the life settlement option. Again, I say option because it is one of multiple choices. One of many choices that the policy owner and the beneficiaries of their policy make together. They might discuss this option when the policy owner has to approach the beneficiaries about signing the contracts.
Once again, this option is not best for everyone. However, it often serves as the best possible option for many.
Posted: Wed Oct 22, 2008 03:42 pm Post Subject:
I get that part. I just think these companies who mbuy life settlements sure get their cake and get to eat it too. I feel for the person who doesn't have family to help them out. When I think of all that cash filling someone's pocket who probaly doesn't need it I think about all the decent charities and research facilities out there that could put that money to good use and for a good cause.
Posted: Wed Oct 22, 2008 10:41 pm Post Subject:
My whole thing about this is the HUGE opportunity for the wrong people to get involved in this and really put it to the insured/policy owner...NOT YOU DEREK, I'm sure you'd agree that opportunity exsists, and we all know that greed has taken over the world!
Posted: Fri Oct 24, 2008 12:05 am Post Subject:
Wonderful post and I agree with you completely.Really does sound like a reverse mortgage..I imagine there has got to be fees just like rev. mortgages too. Some of those places charge fees upwards of $14,000 for an elderly person to borrow $90,000 on a $300,000 home. I don't know but I just think there is just too much for someone to take advantage of.
Posted: Fri Oct 24, 2008 12:47 am Post Subject:
Looks/sounds like a receipt for swindling the old folks to me...I hope (although doubt) that it's closely monitored by some authority.
Posted: Sat Mar 14, 2009 09:36 am Post Subject: Life settlement: risks involved for investors
Well, I agree with the posters here that there is a fair chance of scamming involved in the process of life settlement, but I may also like to point out to the community that the investors too are undertaking great risk in this process.
We all know that death is imminent, but not sure when its going to occur. Hence, if you have gambled your money in a plan where the insured survived passed the time limit, you may end-up with a negative return on the investment.
Life settlement like any other investment option involves a great amount of risk for the investor as well.
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