Life Settlement Expert » Life Settlement Expert

When Should You Sell Your Life Insurance Policy?

Life Settlement Expert — Thu, 12 Aug 2010 02:19:20 +0000

The doomsday reports that litter the Internet disparaging the life settlements industry are often misguided and have little basis in the reality established amongst the legitimate participants in the industry. The “seller beware” caveat that most retiree’s are bombarded with is oft maligned. Yes, there are risks to the life settlements market, as with any investment option. No, the risks do not supersede the potential benefit of a life settlement transaction, nor are they solely borne by the seller.

So far, the main risks to sellers include a lower-than-expected sales offer and not dealing with a reputable life settlements broker. The seller can always decline settlement offers, and brokers can be vetted against NAIC insurance regulations to ensure compliance with licensure.

Industry estimates range on how many life insurance policies lapse (where no death benefit is paid out to the insured’s beneficiaries.) Conservative estimates say that 70 percent of all life insurance policies (both term and permanent insurance) written lapse before any benefits are paid. Instead of letting them lapse, policy holders are now opting to sell the policies on the life settlements market.

That has insurance companies understandably upset. The revenue once generated by lapsing policies has been impacted by life settlement transactions. That has a few insurance company spokespersons crying foul, warning sellers to avoid settlement transactions with observations such as the significant policy value lost during a sale – some claiming up to 75 percent of the policy’s death benefit.

And that’s true. A portion of the value of your life insurance policy is lost upon the sale of that policy to a life settlement buyer. However, there are certain situations in which it makes perfect sense to sell your policy in a life settlements arrangement.

Some of the situations in which a life settlement agreement could be ideal include:

Your policy is about to lapse. You cannot make the premium payments or your policy has become too expensive and unaffordable. If the policy lapses for failure to pay, you lose all your investment, including all premiums you’ve paid to date as cash values are typically drawn down to replace premium payments.

You no longer need coverage. When you bought the policy, you had no other financial means of protecting your family or your business from the financial repercussions of your death. An insurance policy made sense and offered you affordable protection. Has this scenario changed since you purchased the policy?

You don’t have beneficiaries. One of the primary reasons to own life insurance is to protect your family and your beneficiaries in the event of your death. However, circumstances may have changed and that beneficiary relationship may no longer be appropriate. Policies that made sense thirty years ago may be inappropriate today.

You have enough money to cover your expenses. Universal policies allowing you to grow an investment while protecting your beneficiaries gave policyholders the option to get a small return on the policy investments. However, you’ve now completed a successful career or business and you simply have outgrown the policy.

You’re looking to liquidate assets. Your beneficiaries are financially secure, your spouse has enough to live on or is deceased, and you could use extra money in your savings to pay for medical expenses or for retirement and travel. A viable way to obtain additional funds is to sell your life insurance policy to life settlement investors and use the proceeds of the sale however you wish.

Its important to remember that by definition, a life settlement will remit a lump sum cash payment that is greater than the cash surrender value that the carrier would pay out if a policy was surrendered, but less than the death benefit. If the settlement offers do not exceed the cash surrender value, then there is simply no transaction. A simple way to conceptualize this is by example. Say you want to sell your Cadillac, which is 2 years old. You take it to the dealer where you purchased the car and they negotiate a purchase price. You then advertise the car online. If a third party discovers the car online and offers more than what the dealer offered, you would want to sell your car to this third party. This is analogous to a life settlement, whereby a buyer wants to purchase your life insurance policy for more than what the insurance carrier would pay you for the policy via the cash surrender value. If no third party offer exceeds what the dealer offered, you would return the car to the dealer for their agreed upon price. This is analogous to surrendering your life insurance policy to the carrier for the cash surrender value.

Located in Manhattan Beach, California, Opulen Capital is a specialized financial services firm focusing on products and services tailored for senior citizens. Opulen Capital is one of the leading firms offering Life Settlement opportunities for high net worth clientele. We leverage unrivaled experience and exclusive relationships in the life settlement marketplace to structure, obtain, and sell life insurance products to maximize cash profits for our valued clients. Opulen Capital’s mission is to continue to provide the best solutions for our clients through the highest level of integrity and service. For more information, visit our website at http://www.OpulenCapital.com or call Opulen at 877-OPULEN-1 (877-678-5361)

Working with Opulen Capital

Life Settlement Expert — Thu, 03 Jun 2010 20:58:33 +0000

Opulen Capital’s friendly counselors understand your issues. They will listen – and help you navigate through the maze of decisions, leading you to a successful life settlement.

We work for you to simplify the Life Settlement Process.

We will first consult with you to discuss:
1. Your Needs
2. The Process
3. Options

You Provide:

1. Completed Application and Signed
Authorization

Opulen Capital Will:

1. Collect Medical Information
2. Negotiate settlement with our Providers
3. Evaluate options with you

Completion of Process:

1. Opulen Capital will prepare all transfer documents
2. Together we will review final offer
3. Money is deposited into escrow account
4. Upon completion of transfer funds are wired into your
account.

Client Benefits:

1. Assists in financial freedom
2. No Cost
3. Relief from current premium expense
4. Gives you the option to CHOOSE

What’s Next?:

Contact Us And Let Us Help!

What Advisors Should Know About Life Settlements

Life Settlement Expert — Thu, 03 Jun 2010 19:08:59 +0000

Every advisor is familiar with the term “fiduciary”. A fiduciary is “one that stands in a special relation of trust, confidence or responsibility in certain obligations to others”. Fiduciary comes from the Latin root fiducia meaning trust. CPAs, attorneys, financial advisors and insurance agents are fiduciaries to their clients. With that position of trust comes a responsibility and an obligation to advise clients on matters that may affect their financial or economic well-being.
In the last dozen years, an industry has evolved that provides a senior who owns a life insurance policy an opportunity to realize cash (while living) in excess of the policy cash surrender value. Some might argue that the policy owner can withdraw or borrow against the policy cash values. This is, of course, true. What it does not solve is the ongoing premium obligation to keep the policy in force. What if the policy is no longer needed or affordable?

The life settlement industry provides a secondary market alternative to policy lapse or surrender for those unneeded or unaffordable polices.

Why is the secondary market important? Without a secondary market, the only option a senior has to dispose of a life insurance policy is through lapse (non-payment of premium) or surrender (selling it back to the issuing company for a predetermined price). Imagine if you were obligated to sell to sell your home back to the builder for an agreed upon price when you purchased it. Would the market for real estate be as robust as it is with only one buyer? Would any market be strong with only one buyer? Of course not. Prices would be artificially low because of the lack of incentive to pay more than the previously agreed amount. This is the way the life insurance industry works. The secondary market brings to the senior, on average, 3 to 4 times the amount of the cash surrender value depending on the age of the insured, his/her health status, the size and type of policy, and the amount of the guarantee by the issuing company.

The secondary market brings several buyers (generally institutions) to the market for your client’s policy. They compete against one another with the policy going to the highest bidder. Your client is the beneficiary of this competition. As a fiduciary, it is important that you understand that getting multiple buyers involved is the only “true” way to determine fair market value. Sourcing a single buyer does not guarantee your client the highest possible price for the policy.

Fiduciary responsibility dictates that advisors be aware of the secondary market for life insurance and present it as an option to a client when the situation warrants.

Is It Time to Review Your Life Insurance Policy?

Life Settlement Expert — Thu, 03 Jun 2010 19:07:18 +0000

Cash value life insurance carries an investment component along with death protection. Premiums paid in excess of mortality and administrative costs are credited to the accumulation value of the policy. The accumulation values illustrated in the policy at inception are based on an assumed rate of compounding or crediting. These projections do not assume changes in interest rates or equity markets in a variable policy. The last decade has seen some remarkable changes in interest rates. Actual cash values may not have grown as illustrated due to lower interest rates or higher policy expenses. Policy premiums paid, in some cases, may be higher than current policy values, particularly after applying surrender charges. What do you do now?

It may be worthwhile to review your life insurance policy. Perhaps your situation has changed and you no longer need as much insurance or the premiums have become burdensome. In reviewing your insurance plan you and your advisor will want to get a current in-force illustration. This will show actual accumulation values based on current interest rates. Compare this illustration to the one from the policy inception date. A market comparison is part of the policy review process. It could be that despite being older, mortality improvements and increased competition could result in a new policy that could cost you less or, for the same premium, provide a greater benefit. As with auto insurance, it pays to shop around from time to time. A policy review should be conducted at least every 24-36 months.

If you and your adviser agree that policy replacement is the correct course of action, you have some options. One is to surrender the policy in a 1035 exchange using the existing cash value as equity in acquiring the new policy. The cost basis in the old policy becomes the basis in the new and any taxable gains are deferred.

Another possible option is to sell the old policy and use the sale proceeds to acquire a new policy in a life settlement transaction. This option is generally available to seniors over the age of 70 with health impairments that developed after the purchase of the old policy. If you qualify, the settlement proceeds may far exceed the surrender value making this a preferable option to a tax-deferred exchange. As always, please consult with a tax advisor regarding possible tax ramifications of a life settlement.

Questions To Ask Your Life Settlement Broker

Life Settlement Expert — Thu, 03 Jun 2010 19:06:11 +0000

You didn’t come to the decision to sell your life insurance policy in the life settlement market lightly – you weighed the options, hopefully talked with an advisor on the pros and cons of the move, and chose the right brokerage firm to facilitate the sale. Or did you choose the right broker?

Probably the most difficult variable in the life settlement deal for policy sellers is knowing which broker to choose. Policy holders have some valid concerns. Not all broker firms are reputable or even unbiased.
When choosing a firm to represent your life settlement sale, ask the following questions:

Who is the buyer? What you’re looking for is a broker who is not also a buyer of life settlements. Such brokers pose a conflict of interest, and it could be that the interests that broker is serving are not yours.
Is the broker licensed in your state? Most states now have some form of regulation with respect to life settlements. The broker must be registered in each state they are doing business in.
What is the fee and how are broker commissions calculated? The best answer your broker can give you is that commission fees are based on a “value created” method. That means you’re paying a percentage based on the additional amount the broker secured on the sale of the policy, typically 30 percent, over and above the surrender value.
What is the typical application process like? Look for a broker who exercises adherence to regulations whether required to or not. Is there analysis of your medical history by a qualified medical professional?
Will you get to view the various offers? Transparency is key. If your broker is unwilling or says he’s unable to share bids with you, look elsewhere.
How many years of experience does the broker have? Look for someone whose specialty is life settlements and who has a client history of handling life settlements.
How does the broker plan to market your policy? Be exact in what you expect out of the sale. If you’re unsure what dollar amount to aim for, do some preliminary research ahead of time or talk with a financial advisor for some guidance.
Does the broker follow NAIC guidelines? The National Association of Insurance Commissioners have developed the standard guidelines for the insurance industry. Your broker should not only understand them, but adhere to them.
How is your privacy protected? Most life settlement brokers go to great lengths to ensure your private information never reaches the buyer of your policy. Find out what steps your broker takes to protect your personal information.
Does the broker firm carry errors & omissions coverage? Mistakes happen. A broker firm that carries appropriate levels of errors & omissions coverage is demonstrating a commitment to protecting their clients’ interests. Plus most insurance companies have strict minimum requirements brokers must meet in order to qualify for coverage.

If you have questions about how to interview your life settlement broker, Opulen Capital can give you a free consultation pointing out the requirements you should expect from your broker. Call us at 877-678-5631, or find out more at http://www.OpulenCapital.com.

Why Are Life Settlement Brokers So Beneficial?

Life Settlement Expert — Thu, 03 Jun 2010 01:37:01 +0000

Fred has had his life insurance policy since he was 21. At 66, Fred assessed his policy against his current situation. His children are grown and have established careers. They make more money than he does, and his policy is no longer useful to him as coverage since he and his wife have prepaid their funeral expenses. Recently, Fred’s business has suffered through some significant losses due to the recession, and he’s considering his options. Should he take out a business loan with a mid-range interest rate or should he look for capital elsewhere? If Fred is smart, he’ll include the life settlements market as one of those options.
If you’re considering selling your life insurance policy in the life settlement market, you have plenty of options on who will sell your policy. To ensure you get the best deal for your policy, you should understand how each entity in the life settlement market operates.

Financial advisors are an evolving group within life settlements. Accountants, attorneys, wealth managers and the like have entered the life settlement market in order to unravel the complex financial structures associated with life settlement deals. While many do not specialize in life settlements, they do specialize in financial transactions.

Life settlement providers are the purchasers of your life insurance policy. They have the industry experience required to analyze your policy and valuate it accurately. With the expertise in-house for vetting policies and developing offers, they compile portfolio assets (policies) into sellable pools that look attractive to investors.

Life settlement brokers bring together buyers and sellers of life insurance policies. For the sellers, brokers will shop your policy to a number of life settlement providers, bringing in select offers, which in turn has life settlement providers competing for your policy. Brokers charge a fee based on the value of the policy.

Why go with a life settlement broker over a financial advisor or a life settlement provider? Because by dealing with more life settlement providers, brokers are able to reach multiple buyers for one policy. Also, brokers vet the buyers, knowing from experience and from buyer discussions which buyers will close on life settlement agreements with the least amount of effort.

And life settlement brokers have the advantage of specializing in the industry. While financial advisors are important to the transaction and should be included in the process, life settlement brokers know the market, the buyers, the validity of any offers, and the current price points for life insurance policies in the life settlements market. Brokers have the advantage over financial advisors that they are able to obtain the best possible price for the seller.

Probably the biggest advantage of using a life settlement broker over any other advising entity is that brokers understand the market and can explain to you in detail the process. Brokers know when to enter the market, what the current market volatility is, and what the seller should expect in terms of offers from buyers.

Because the life settlement market is not without risk, you should consult someone with industry expertise. By specializing in life settlements, brokers can better assess the risks of selling and help sellers time their entry into the market.

Opulen Capital is one of the leading firms offering Life Settlement opportunities for high net worth clientele. Email us or call 877-678-5361.

Old Faithful Company announces Life Policy Loan Release

Life Settlement Expert — Thu, 10 Dec 2009 01:26:29 +0000

New idea will fuel alternatives to Life Settlements

CASPER — December 6, 2009— Move over life settlements, a revolutionary new patent pending idea promises to do just as much as a life settlement without the loss of the life insurance policy! Old Faithful Company this week launched a process to help people leverage life insurance to receive money without selling the life insurance policy and losing all the benefits of life insurance policy ownership.

In a world where people are looking for opportunities to capitalize on their assets to bring in money to support their day to day living, there is now a new option for life insurance policy owners. No longer do you have to sell your policy and lose your asset in order to find money. The revolutionary idea is nothing new. Simply put, it is a new spin on an old idea. Strategic Benefits Marketing Group is now marketing the concept in order to empower people to accomplish all of this. Company president, Henry Silva, believes that this will revolutionize the industry and turn conventional wisdom on its’ head.

Record Rate of Life Settlements
The life settlement industry accounts for more than $170 Billion since inception. Many customers have already benefited from this new process. (ken Nelson), an gentleman in his mid 60’s tried everywhere to find someone to work with him on his life policy. Everywhere he looked, he was turned down. It wasn’t until he brought his policy to the attention of the professionals at Strategic Benefits Marketing Group, that he found an option for him to capitalize on his policy without losing ownership! He was amazed that anyone would work with someone who had a life expectancy of over 20 years! Silva explained that this process is not limited like the life insurance settlement industry because it breaks ALL of the traditional barriers. People who own policies with low face amounts, not enough health issues and most importantly, short term cash needs. This will surely find a very prominent and important place within the financial community for those insureds over age 65 falling through the cracks. It is estimated that there are some 4 million policies that account for this market.

Founded 2006, Strategic Benefits Marketing Group is the worldwide leader in marketing this process through insurance agents, financial professionals as well as accountants and attorneys. The company offers a wide range of products and services designed to empower people through great products — any time, any place and with any means.

For more information, press only:
Ronald Spomer, (307.213.4991), rspomer@oldfaithfulcompany.com

For more information on Old Faithful Company:

http://www.oldfaithfulcompany.com

For more information on Strategic Benefits Marketing Group:

http://www.sbmarketinggroup.com

Law regulates 'life settlement' deals — Page 1 — Times Union …

Life Settlement Expert — Mon, 07 Dec 2009 16:00:43 +0000

Measure aims to protect cash-strapped life insurance policy holders.

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U.S. and European Life Settlement Associations Announce …

Life Settlement Expert — Tue, 01 Dec 2009 21:57:49 +0000

Orlando, Florida – As interest in the life settlement industry climbs, two major trade groups unveil plans to host an international trade mission in Europe. In 2010, the Life Insurance Settlement Association (LISA) and the European Life …

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Columbus Chamber Announces Ohio Ranked on “Top 10 Business …

Life Settlement Expert — Thu, 19 Nov 2009 21:50:20 +0000

EAGiL Life Settlements, LLC Is Granted A Life Settlement Provider License In Ohio Woodcliff Lake, NJ – October 26, 2009 — Guy E. Runyon, President and CEO of Eagil Life Settlements, LLC, announced. …

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