A life settlement is the sale of an existing life insurance policy in the secondary market by a policy owner at a price discounted from the face amount but in excess of the cash surrender value.
A policy owner can keep on paying even though the policy is no longer of value due to changing personal circumstances. He or she could stop paying premiums and allow the policy to lapse. Or, the policy owner could sell the policy to an investor for an amount that is often much greater than its current cash surrender value with your help - and ours. In some cases, the client can retain a portion of the death benefit with no additional premiums due.
The short answer is "yes". The demographic trends of an aging population coupled with an increase in life insurance policies translates to burgeoning future growth with market potential predicted to reach hundreds of billions of dollars in face value.
We work with life insurance agents, CPAs, attorneys, brokers, estate planners, financial and investment advisors, wealth management advisors - in short, any financial professional with high-net-worth clients.
The best candidate for a Life Settlement is a 70+ policyholder with a life expectancy of 15 years or less, who has experienced a change of health since the policy was issued. A death benefit of $1,000,000+ with a policy in force for at least two years is optimal (cases below $1,000,000 done on a case-by-case basis).
The life settlement business continues to evolve and change and it is different from viatical settlements, which exclusively involve terminally ill individuals. If you are not sure if a case qualifies, you should always call your life settlement representative.
Today, the typical life settlement client is a 70+-year-old high-net-worth individual who approaches the transaction as business decision; liquidating the life insurance policy for an amount greater than its cash-surrender value. However, we have successfully sold policies for younger individuals; We strongly encourage you to call us to discuss your client's need before accepting the surrender of his or her policy.
Yes, as long as the policy face value is $1,000,000 or over. We often work with businesses who have experienced a change in key executives or succession plan, need cash to monetize assets, or wish to fund deferred compensation programs or severance packages.
The vast majority of them - over 70% -- purchase less costly and more appropriate financial solutions, such as new insurance, annuities or long-term-care coverage. Others fulfill financial, health-related or lifestyle objectives, reduce potential tax liability, or gift family members or charitable funds.
Your broker should have significant industry knowledge and have a proven history of transacting at least $500 million in aggregate face amount. The firm should be reputable, and backed by high quality institutional investors. In addition, the firm should carry errors and omissions coverage, be properly licensed in all applicable states, and be a member of LISA. LSCOA meets all these stringent qualifications.
As always, you are the first resource for your client - meeting with him or her, getting forms signed, answering questions. We do everything we can to keep the process moving along smoothly - ordering medical and life expectancy reports, submitting the policy to high quality funding institutions, negotiating on your client's behalf, preparing closing documents.
The Life Settlement Company of America was co-founded by two long-time friends with over a quarter of a century of combined financial services experience. Richard Nemet, a former owner of an NASD registered broker dealer, is an expert in brokerage operations. Robert Settlow has been originating and processing financial transactions for over 14 years.
One of our key roles is to inform and educate. We support advisors with client marketing materials, experienced back office support and outstanding customer service.
E-mail: info@lscoa.com | 973-486-3000
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