Life Settlements and you
Turning Life Insurance into Cash
Wednesday, September 29, 2010
Life Settlements - Buyer Beware
http://www.producersweb.com/r/pwebmc/m/erez+rotem check out my article on producersweb.com
Monday, September 27, 2010
Familiarize Yourself With The Option of a Life Settlement (Part 2)
Familiarize Yourself With The Option of a Life Settlement (Part 2)
This is Part 2 of a three part series presented by Integrity Life Solutions and Integrity Life SettlementsPart 1 can be viewed at http://www.freecpe.org/life/senior-life-insurance-settlements
Why would an individual or trust want to sell a life insurance policy? For the same reasons that an individual would cash in or lapse a policy. They may no longer want or need the policy – their beneficiaries have pre-deceased them, their children are grown and independent, their estate has diminished and their potential estate tax has decreased or disappeared, or their company has been sold and a buy-sell agreement is no longer applicable. They may no longer be able to afford the premiums - their retirement assets have diminished and are no longer producing enough income to cover the premium payments, or they need the money they were using for premiums to pay for other expenses like long term care or nursing home expenses. Or, they simply may need cash. Often their goals have changed and rather than leaving money to their beneficiaries, they want more cash to supplement their own living expenses. Sometimes older individuals live longer than they had planned for. But, in fact, they could need the cash for innumerable other reasons. Consider this example closely. An owner of a 20 year term policy may never have had the intention of converting it to a permanent policy, a feature that exists on most term policies, and is now letting it lapse. But your client may instead have the ability to sell the policy to an investment company which will then convert the policy for their own benefit after the sale. Your client could be walking away from thousands of dollars because of his ignorance, and of course the carrier will be "laughing all the way to the bank" now that its obligation to pay any death benefit has ceased. Alternatively, the client may still want to have insurance, and need insurance, but the current policy may not fill his needs. A new policy may offer more bells and whistles, such as a death benefit guarantee or a longer death benefit guarantee. Internal costs of insurance have decreased in newer policies. So, the client is considering exchanging the current policy for a new one in the context of a 1035 exchange of the cash value. However, even after consideration of the tax advantages under section 1035, it may be more lucrative to sell his current policy (likely a taxable event) if the sale price is much greater than cash surrender value of the existing policy. Many life settlements, in fact, result in cash payments to sellers of amounts in excess of 4 or 5 times the cash surrender value.
What kind of policies sell? All kinds of policies, including term policies, as long as they are convertible to a permanent policy. Some policies, however, are more marketable than others. The sale price is dependent upon at least these 5 variables: (1) the face of the policy (the amount of the death benefit), (2) the life expectancy (LE) of the insured, (3) the cash surrender value (if any), (4) the insurance company's rating or credit worthiness and (5) the cost to keep the policy in force – projected premium payments. The death benefit, cash surrender value and the credit rating of the issuing insurance company are fairly simple and straight forward. The life expectancy of the insured is very much the crux of the issue. Obviously, the shorter the life expectancy, the greater the buying price as a percentage of the death benefit. This is because the shorter the life expectancy, the sooner the secondary buyer or new owner will collect the death benefit and less in premiums needed to carry the policy forward. As to premiums, buyers require up-to-date illustrations from the carriers indicating how much they should expect to pay over the coming years, through expected maturity (or the LE year); Buyers will always want to pay the minimum premium to keep the policy in force – that is the cost of insurance only.
Potential buyers evaluate how much they might be willing to bid on a policy based upon their own projected internal rates of return (IRR) in light of these and other parameters. Although somewhat anecdotal, my understanding is that offers will be made on the basis of IRRs from 12 percent to 20 per cent, and higher, after consideration of the fund's total investment (initial purchase price, plus future premiums). And these figures may be net of other transactional costs not within the scope of this discussion.
Integrity Life Solutions, LLC offers a free CPE course with No Strings Attached. Our free CPE course is written per NASBA guidelines which approves us to offer a 100 minute free CPE class. This course is designed to save you time and money while you learn and earn free credits.
This 2 credit free CPE and CFP class introduces an overview to the Life Settlement industry. This free CPE course will explain why it is your fiduciary duty as a CPA and CFP to understand and recognize a viable life settlement and to be able to explain it to your clients.
http://www.freecpe.org/ or www.integritylifesettlements.net or call 973-275-1110
Integrity Life Settlements is a viatical settlement and life settlement broker, located in the New York area in Maplewood NJ. They negotiate the transaction between the seller and the Buyer. Their expertise is in obtaining the highest possible value for your policy from only reputable financial institutions. Integrity Life Settlements is affiliated with other professionals including attorneys, accountants and actuaries who can provide you with independent financial advice. If you prefer, Integrity Life Settlements will work with any of your trusted financial and legal advisors. In either case, a due-diligence will be performed prior to any transaction.
http://www.freecpe.org/ or www.integritylifesettlements.net or call 973-275-1110
Sunday, September 26, 2010
Integrity Life Settlements: Life Settlements Buyer Beware - the” Unloading” of...
Integrity Life Settlements: Life Settlements Buyer Beware - the” Unloading” of...: "Buyer Beware - the” Unloading” of Failed STOLI Policies on an Individual Basis This anecdote is a true story – I will not disclose others’ n..."
Life Settlements Buyer Beware - the” Unloading” of Failed STOLI Policies on an Individual Basis
Buyer Beware - the” Unloading” of Failed STOLI Policies on an Individual Basis
This anecdote is a true story – I will not disclose others’ names to protect the innocent and regrettably, most likely, the guilty as well. This brief article is not of journalistic quality, I admit – I have not dug into and verified the facts. Take it with a grain of salt, if you must – but read on and judge for yourself.
We are brokers in the life settlement industry – the purchase of seniors’ life insurance policies by investors who wait for someone’s death to collect their rewards. This is a shameful place to be – an industry tainted with the stench of malfeasance - bid-rigging; mismanagement; misrepresentations; fraud; bankruptcy; even ponzi artists using the life settlements name only to defraud unwitting investors of their hard-earned money – the perps not even knowing the first thing about life insurance or life settlements, actually. We are worse than ambulance chasers. We thrive when others are sick. We pray for low life expectancies; we rejoice when others are about to die; investors rejoice when they do die.
Or some would believe or have you believe. In actual fact, we are business people, performing a service, doing the best we know how, representing those to whom we owe a fiduciary duty and moral obligation. We are really no different from you. We happen to have landed in an industry with a serious public relations problem. A funeral home is a business that might be said to thrive on death, but does not cause death, hasten death, and its shareholders certainly do not wish for death – death…. just is.
But when Joe walked through our door today, and we discussed his possible purchase of a $6mm life insurance policy that was offered to him by an agent in the life insurance business – a proverbial friend of a friend – I knew why we are sometimes viewed as basically dogs living in the gutter. Is that too harsh a description? Joe described the policy as being cheap - $140,000 annual premium per year. But he (the agent) said that the premiums might go up some – but he can’t know exactly how much. The current owner purchased the policy about two years ago from the original owner, six months after it was initially issued. The insured is 77 now, and has some serious health issues – and they would provide medical records, but there was no mention of a particular life expectancy, LE reports, or the like. The policy had never been shopped before – that is, offered out to the institutional market – this was a private sale – the owner is more interested in selling this privately because he thinks he can do a bit better this way, rather than paying institutional fees.
Joe gave us the name of the insured. We checked the case out with our local friendly provider who told us on the QT that the case was rejected by them. The meds were provided by a doctor who has been red-flagged as being, let us say, unreliable. It would also be impossible to obtain an LE report from at least one noteworthy LE company, because it also has refused to accept any meds from such doctor for the same reasons.
At the risk of being accused of profiling by geography or ethnicity, or both, the policy, agent and owner were all apparently from the same Borough, informally or purposefully blacklisted by some in our industry. If you are able to read between these lines above, it is an indication at least of reputational smoke, to which I refer, if not the actual burning bush, so to speak. I must say that while the reputation may be deserved from five miles up, unless one is a complete cynic (which I am not….today) then one must recognize that there are always exceptions to the rule and one should not cast aspersions on an entire class.
What was described, to me, however seems clear although admittedly only on a gut level – a STOLI policy purchased 2.5 years ago, on the basis of false medical records, with the intent of resale after the contestability tolled, which was not too long ago. Failing the sale of the policy into the secondary institutional market, said policy owner is seeking to unload this policy at retail.
It is no wonder why we get slapped around for being part of disreputable, corrupt and otherwise immoral enterprise. If you are approached about the purchase of any marketable in an asset class with which you are totally unfamiliar – such as Joe was in relation to life insurance – do what Joe did. Find someone who you trust and ask a lot of questions. Bottom line, with our advice to stay clear, we may have saved Joe about $1 million in premiums on a policy that, assuming it was not contested by the carrier on the basis of insurable interest or fraud, would not “mature” in any sensible investment timeframe.
Please visit us at www.freecpe.org to learn the basics of life settlements
The reader is encouraged to attend Integrity Life Solutions, LLC Free CPE seminars for further information about this and other topics in the life settlement arena. Contact Susan Lubin, CFP at 973.275.1110 or susan@iLifesolutionsllc.com
This anecdote is a true story – I will not disclose others’ names to protect the innocent and regrettably, most likely, the guilty as well. This brief article is not of journalistic quality, I admit – I have not dug into and verified the facts. Take it with a grain of salt, if you must – but read on and judge for yourself.
We are brokers in the life settlement industry – the purchase of seniors’ life insurance policies by investors who wait for someone’s death to collect their rewards. This is a shameful place to be – an industry tainted with the stench of malfeasance - bid-rigging; mismanagement; misrepresentations; fraud; bankruptcy; even ponzi artists using the life settlements name only to defraud unwitting investors of their hard-earned money – the perps not even knowing the first thing about life insurance or life settlements, actually. We are worse than ambulance chasers. We thrive when others are sick. We pray for low life expectancies; we rejoice when others are about to die; investors rejoice when they do die.
Or some would believe or have you believe. In actual fact, we are business people, performing a service, doing the best we know how, representing those to whom we owe a fiduciary duty and moral obligation. We are really no different from you. We happen to have landed in an industry with a serious public relations problem. A funeral home is a business that might be said to thrive on death, but does not cause death, hasten death, and its shareholders certainly do not wish for death – death…. just is.
But when Joe walked through our door today, and we discussed his possible purchase of a $6mm life insurance policy that was offered to him by an agent in the life insurance business – a proverbial friend of a friend – I knew why we are sometimes viewed as basically dogs living in the gutter. Is that too harsh a description? Joe described the policy as being cheap - $140,000 annual premium per year. But he (the agent) said that the premiums might go up some – but he can’t know exactly how much. The current owner purchased the policy about two years ago from the original owner, six months after it was initially issued. The insured is 77 now, and has some serious health issues – and they would provide medical records, but there was no mention of a particular life expectancy, LE reports, or the like. The policy had never been shopped before – that is, offered out to the institutional market – this was a private sale – the owner is more interested in selling this privately because he thinks he can do a bit better this way, rather than paying institutional fees.
Joe gave us the name of the insured. We checked the case out with our local friendly provider who told us on the QT that the case was rejected by them. The meds were provided by a doctor who has been red-flagged as being, let us say, unreliable. It would also be impossible to obtain an LE report from at least one noteworthy LE company, because it also has refused to accept any meds from such doctor for the same reasons.
At the risk of being accused of profiling by geography or ethnicity, or both, the policy, agent and owner were all apparently from the same Borough, informally or purposefully blacklisted by some in our industry. If you are able to read between these lines above, it is an indication at least of reputational smoke, to which I refer, if not the actual burning bush, so to speak. I must say that while the reputation may be deserved from five miles up, unless one is a complete cynic (which I am not….today) then one must recognize that there are always exceptions to the rule and one should not cast aspersions on an entire class.
What was described, to me, however seems clear although admittedly only on a gut level – a STOLI policy purchased 2.5 years ago, on the basis of false medical records, with the intent of resale after the contestability tolled, which was not too long ago. Failing the sale of the policy into the secondary institutional market, said policy owner is seeking to unload this policy at retail.
It is no wonder why we get slapped around for being part of disreputable, corrupt and otherwise immoral enterprise. If you are approached about the purchase of any marketable in an asset class with which you are totally unfamiliar – such as Joe was in relation to life insurance – do what Joe did. Find someone who you trust and ask a lot of questions. Bottom line, with our advice to stay clear, we may have saved Joe about $1 million in premiums on a policy that, assuming it was not contested by the carrier on the basis of insurable interest or fraud, would not “mature” in any sensible investment timeframe.
Please visit us at www.freecpe.org to learn the basics of life settlements
The reader is encouraged to attend Integrity Life Solutions, LLC Free CPE seminars for further information about this and other topics in the life settlement arena. Contact Susan Lubin, CFP at 973.275.1110 or susan@iLifesolutionsllc.com
Friday, September 24, 2010
Integrity Life Settlements: Investing in Life Settlements
Integrity Life Settlements: Investing in Life Settlements: "As life settlement brokers in the Life Settlement industry, it is becoming more and more apparent to us Integrity Life Solutions, LLC, that ..."
Investing in Life Settlements
As life settlement brokers in the Life Settlement industry, it is becoming more and more apparent to us Integrity Life Solutions, LLC, that investments in life settlements may not only be prudent from a diversification standpoint, but also relative to internal rates of return, or return on investment. Life Settlements are generally non-correlated investments with possible yields from 10% to in excess of 20% on a net basis, even after accounting for fees and other expenses. The slowdown of purchases of life insurance policies on seniors and the lack of liquidity in the marketplace has made this truly a buyer’s market.
But we find that a lot of institutional investors are kicking the tires again. The market has stabilized in the sense that certain illicit behaviors have all but ceased (STOLI and illicit premium finance transactions) and the Internal Revenue Service has opined in two Revenue Rulings last year (IRS Revenue Ruling 2009-13 and IRS Revenue Ruling 2009-14) dealing with the tax impact on the seller of a life settlement, and the investor, respectively. Although these IRS Revenue Rulings may not have the effect of adjudicated or statutory law, they do provide some clarity as to tax rules as they apply in the Life Settlement arena. http://www.irs.gov/pub/irs-drop/rr-09-14.pdf
In the first IRS Revenue Ruling 2009-13, the Service asks and then answers two questions:
1. What constitutes a gain?
2. To the extent there is a gain, how is it characterized – ordinary or capital?
To learn more about Life Settlements visit http://www.freecpe.org/
Integrity Life Solutions offers continuing education credits to CPAs, CFPs, and NJ insurance licensed agents
To learn more about Life Settlements visit http://www.freecpe.org/
Integrity Life Solutions offers continuing education credits to CPAs, CFPs, and NJ insurance licensed agents
Wednesday, September 22, 2010
Integrity Life Settlements spotted in St Louis MO
Erez Rotem of Integrity Life Settlements has been spotted in St Louis MO
Erez is here for the Prospera Financial Annual Conference
Erez will demonstrate the Integrity Life Solutions. net website
This will help Prospera Financial Services reps look like experts in life settlements to their clients
Erez is here for the Prospera Financial Annual Conference
Erez will demonstrate the Integrity Life Solutions. net website
This will help Prospera Financial Services reps look like experts in life settlements to their clients
Monday, September 20, 2010
Familiarize Yourself With The Option of a Life Settlement (Part 1)
As a part of your fiduciary responsibility, you should be familiar with the option of a life settlement for any client with a life insurance policy, be it an individual, a trust or a business. You should be aware that there exists a secondary market for life insurance policies, an institutional market which buys life insurance policies purely for financial gain.
Familiarize Yourself With The Option of a Life Settlement
What is a life settlement? A simple definition is “the sale of a life insurance policy on the life of a senior into a secondary market for more than the cash surrender value.”
As a part of your fiduciary responsibility, you should be familiar with the option of a life settlement for any client with a life insurance policy, be it an individual, a trust or a business. In fact, several states have statutes on the books that make it mandatory for an insurance company to notify an owner about this option if he is surrendering or lapsing a policy. You should be aware that there exists a secondary market for life insurance policies; an institutional market which buys policies purely for financial gain – that is, the death benefit. There are enough of these institutional buyers such that a rather organized market has evolved over the past twenty years.
While policy values in today’s market are somewhat depressed due to global financial conditions, for any market to work, sellers must benefit also. Here is how it typically works. Life settlement brokers, who represent the seller, solicit bids from possible buyers (institutional funds) with the intent of creating an informal auction, in which buyers are bidding against one another, driving up the price. It is important to understand that a life settlement broker can tap into the entire market at one time. Naturally, there can be a huge difference in the selling price between simply contacting one life settlement buyer as compared to getting multiple bids through a broker. Beware, therefore, of the distinction between buyers and brokers. Bottom line, a life settlement broker works for your client to maximize the sale price of a policy by leveraging potential buyers against one another. The broker’s commission, being a percentage of the gross sales price, will increase as well, so the broker has an incentive to perform well for his client.
Integrity Life Solutions, LLC offers a free CPE course with No Strings Attached. Our free CPE course is written per NASBA guidelines which approves us to offer a 100 minute free CPE class. This course is designed to save you time and money while you learn and earn free credits.
This 2 credit free CPE and CFP class introduces an overview to the Life Settlement industry. This free CPE course will explain why it is your fiduciary duty as a CPA and CFP to understand and recognize a viable life settlement and to be able to explain it to your clients.
http://www.freecpe.org/
Integrity Life Settlements is a viatical settlement and life settlement broker, located in the New York area in Maplewood NJ. They negotiate the transaction between the seller and the Buyer. Their expertise is in obtaining the highest possible value for your policy from only reputable financial institutions. Integrity Life Settlements is affiliated with other professionals including attorneys, accountants and actuaries who can provide you with independent financial advice. If you prefer, Integrity Life Settlements will work with any of your trusted financial and legal advisors. In either case, a due-diligence will be performed prior to any transaction.
http://www.freecpe.org/
Life Settlement Webinar - earn free CPE and CFP credits
Webinar: Life Settlements - Introduction and Best Practices
Date: October 12, 2010
Time: 11:30 am, Eastern Daylight (New York, GMT-04:00)
Join our next webinar to earn free continuing education credits
Earn 2 CFP or CPE credits
Register at http://www.freecpe.org/ or call us at 973-275-1110
Date: October 12, 2010
Time: 11:30 am, Eastern Daylight (New York, GMT-04:00)
Join our next webinar to earn free continuing education credits
Earn 2 CFP or CPE credits
Register at http://www.freecpe.org/ or call us at 973-275-1110
Saturday, September 18, 2010
Californias authorized list of life settlement providers pending
Visit http://www.freecpe.org/ to learn the basics of life insurance senior settlements
Know your rights and know your options
Integrity Life Solutions expert life settlement and viatical settlement brokers
Life Settlement Providers Currently Authorized to Transact Life Settlements inCalifornia Pending Review of Applications (California
Know your rights and know your options
Integrity Life Solutions expert life settlement and viatical settlement brokers
Life Settlement Providers Currently Authorized to Transact Life Settlements in
- ABACUS SETTLEMENTS, LLC
1790 Broadway,Suite 1500New York ,NY 10019 - AXIS THOUGHT CAPITAL, LLC.
708Third Avenue , Fifth Floor
New York ,NY 10017 - BERKSHIRE SETTLEMENTS, INC.
112 Krog St ., Suite 24Atlanta ,GA 30307 - CALDWELL FUNDING CORPORATION1055 Washington Boulevard
Stamford, CT 06901
(203) 517-0100 - CREDIT SUISSE LIFE SETTLEMENTS, LLC
11 Madison Avenue , EMA 9th Floor
New York NY 10010 - ECONOTREE CAPITAL, INC.
1Bridge Plaza
Fort Lee ,NY 07024 - FAIRMARKET LIFE SETTLEMENTS CORP.
435 Ford Road, Suite 120 St. Louis Parke MN 55426 - FINANCIAL LIFE SERVICES, LLC
60 Long Ridge Road, Suite 205 Stamford CT 06902
(203) 964-1200 - GWG LIFE SETTLEMENTS, LLC
220 South Sixth St., Suite 1200
Minneapolis, MN 55402
(612) 746-1943 - INSTITUTIONAL LIFE SERVICES, LLC
340 Madison Ave. , 21st Floor
New York ,NY 10173 - LEGACY BENEFITS LLC
350 Fifth Ave., Suite 4320
New York, NY 10118
(212) 643-1190 - LIFE PARTNERS, INC.
204 Woodhew Drive Waco ,TX 76712 - LIFE SETTLEMENT CORPORATION
(DBA PEACHTREE LIFE SETTLEMENTS)
3301 Quantum Boulevard, 2nd Floor
Boynton Beach, FL 33426
(800) 444-9820 - LIFE SETTLEMENT SOLUTIONS, INC.
9201 Spectrum Center Blvd. , Suite 105San Diego ,CA 92123 - LIFETRUST, LLC
330 Madison Ave. New York ,NY 10017 - LOTUS LIFE LLC
2 Greenwich Plaza, First Floor
Greenwich, CT 06830
(203) 542-4800 - MAPLE LIFE FINANCIAL, INC.
4350 East-West Highway, Suite 900
Bethesda, MD 20814
(301) 951-2143 - MONTAGE FINANCIAL GROUP, INC.
27201 Puerta Real,Suite 170Mission Viejo ,CA 92691 - PORTSMOUTH SETTLEMENT COMPANY I, LLC
101 Beckett Lane, Suite 101
Fayetteville, GA 30214
(800) 250-3230 - PROGRESSIVE CAPITAL SOLUTIONS, LLC
477 Madison Ave., Suite 210
New York, NY 10022
(212) 608-4900 - PROVERIAN CAPITAL, LLC
111 Broadway, Suite 603
New York, NY 10006
(212) 532-2646 - Q CAPITAL STRATEGIES LLC
950Third Ave. 23rd Floor
New York ,NY 10022 - SECONDARY LIFE CAPITAL, LLC
1010 Wisconsin Ave., NW Suite 620
Washington DC 20007
(202) 464-1061 - SENIOR SETTLEMENTS, LLC
303 Harper Drive Moorsetown ,NJ 08057 - SETTLEMENT GROUP, INC. (THE)
300 Osborne St .
Saint Marys GA 31558
(912) 882-0840 - SLG Life Settlements, LLCFive Concourse Parkway, Suite 3100Atlanta GA 30328(678) 332-5000
- SPIRITUS LIFE, INC.
2016 San Esteban Circle Roseville ,CA 95747 - TRINITY LIFE SETTLEMENTS LLC
5157 Main Street, Suite 200
Downers Grove, IL 60515
(630) 960-7100 - VIASOURCE FUNDING GROUP, LLC
106 Allen Road
Bernards Township, NJ 07920
(908) 394-7778
Friday, September 17, 2010
If I reposted this article and called it "the wonders of life settlments" would anyone care?
What is a Life Settlement? The sale of a life insurance policy on the life of a senior (generally at least 65 years old) into a secondary market, for a lump-sum cash payment in excess of the cash surrender value. A life settlement would be done instead of surrendering the policy (or lapsing it) to the life insurance company (and for more money than would have been received by surrendering it). How is a Life Settlement different from a Viatical Settlements. Although they are often used interchangeably, a Viatical Settlement technically refers to the sale of a policy where the Insured is terminally ill and (regardless of age) has a life expectancy of less than two years. While laws in some states may differ for the two, and while the Internal Revenue Code has special rules for the terminally ill, Viatical and Life Settlements are otherwise very similar. Who are the buyers? What is their motivation? Institutional investors (such as hedge funds, investment banks) that comprise a secondary market in life insurance, that seek a rate of return on the death benefit. The Buyer pays the sales price, any premiums necessary going forward, and collects the death benefit when the insured dies. What involvement does the current owner (Seller) and Insured have after the transaction? The Seller gets the cash and essentially walks away from the transaction. However, the Insured remains the Insured after the transaction and the policy on his life will remain in force likely until maturity (death). Also, the Buyer will contact either the Insured, or his designee(s) about every six months, as to the health status of the Insured. Once paid, what can Seller use the proceeds for? Anything. (But note, taxes may be due on the gains.) Should Insured be concerned that an investment company owns a policy on his life? Some do not feel comfortable with this concept – it is a personal judgment call. However, never has the death of an Insured been reported to have been caused by an investment company in this context. Also, this financial “bet” against the longevity of the Insured exists on annuity and pension products, so the concept should not be entirely foreign. What factors influence the Buyer to purchase the policy, or not, and how much to offer? Among others.. Ø Age and health of the insured. Ø Type of policy being sold (UL, Whole, Variable UL, Survivorship, Term, etc). Ø Cost of the policy going forward. Ø Rating of the carrier. Ø Face amount, or death benefit, or the policy. What types of policies can be sold as a Life Settlement? Any type of policy, except a term policy that cannot be converted to a permanent policy. Investors require that the policy extends to at least age 95 or 100, and therefore term policies that are not convertible to permanent insurance do not meet this criterion. What are the most popular reasons people think about doing a Life Settlement? Ø They cannot afford current premiums and need cash for other purposes more importantly. Ø They no longer need the policy for estate planning purposes (due, perhaps to a loss of net worth, or change in the tax laws. ) Ø Their term policy has to be renewed or converted to permanent insurance and the new higher premiums are unaffordable. Rather than lapsing the policy, one may sell it into the secondary market. Ø Where a Life Settlement proves to be a better alternative to a 1035 exchange (e.g. relative to the replacement of needed coverage with a new better performing policy). This would be the case when the sales price, even after taxes, is higher than the cash surrender value in the 1035 exchange. Ø Corporate owned policies where: o The key person has left the company and insurance is no longer needed. o The company requires liquidity more than the insurance o Where the circumstances creating the need for a buy-sell agreement no longer exist. § e.g. the uninsured partner has pre-deceased the insured (older) partner. How much is paid for a Policy? Each case is different. Brokers should be able to indicate if a case falls clearly outside of market parameters (as to Insured’s health and age, policy type, e.g.) in which case it would not be worth going any further. On the other hand, if a case falls within market parameters, it is very difficult for anyone to make predictions as to market value unless and until the policy is “shopped” in the market. At what point does Seller obligate himself to completing the transaction? A life settlement is Seller’s option right up to the point where closing documents are signed, normally months after the process was initiated and only after a complete valuation process by Broker. In fact, in many states, Seller is even afforded 15 days after receiving the funds, during which (rescission) period Seller can change his mind, give back the money and cancel the transaction. What are potential pitfalls to a Life Settlement – how can I avoid these? Just like in any serious financial transaction, Sellers should enlist the assistance of competent and trusted professionals to ensure legal compliance and appropriate due diligence. Here are some of the things that might go wrong, and ways to avoid them. Ø PITFALL Seller sells policy too cheaply. ØAvoidance Strategy: Retain a life settlement broker, who specializes in this field. Life insurance agents often do not specialize and themselves refer their client’s case to a trusted Broker with whom they work. It is Brokers job represent Seller amongst some 20-40 possible institutional Buyers; Broker should create an auction amongst interested Buyers to maximize the value of the policy. (Beware of agents that do the work or claim to do the work themselves – they may only “shop” the policy with only one or two potential Buyers). Ø PITFALL Seller does not know what others in the transaction are being paid. ØAvoidance Strategy: Seller and his Broker should establish an understanding in writing about what compensation the Broker will be paid upon a successful transaction prior to commencing the transaction. Brokers (including life insurance agents that referred the case to the Broker) should never be paid anything unless the policy has been sold and Seller receives his funds. Broker is paid from the sales proceeds – that is by Buyer or an escrow agent – but to extent Broker receives a large commission, this reduces the amount paid to Seller. Sellers should require Brokers to show Seller all of the written offers it has received on the Policy. Ø PITFALL Insured may limit his ability to get additional life insurance after this. ØAvoidance Strategy: Insured will likely be required to disclose all insurance on his life, including policies that have been “settled” or sold. Insured’s capacity to purchase more insurance is reduced to the extent that he already has insurance on his life. Insured/Owner should be sure that selling the policy is the right thing to do in view of future insurance needs. Ø PITFALL Seller needs the funds in a hurry, but the transaction is taking too long. ØAvoidance Strategy: This is a lengthy process that requires approximately at least three months; sometimes longer and each case is different. Sellers should stay in close contact with their agent and Broker as to the status of their case but should not set unrealistic expectations as to timing. About the authors Alex Sirotkin, JD, is CEO and co-founder of Integrity Life Settlements in Maplewood, NJ, a Life Settlements brokerage since February, 2004. Erez Rotem, LUTCF, is the President of Integrity Life Settlements. For further information - alex@iLifesettlements.com. |
Thursday, September 16, 2010
Q & A with Integrity Life Settlements
http://www.prlog.org/10936658-questions-and-answers-with-integrity-life-settlements.html
http://www.prlog.org/10936658-questions-and-answers-with-integrity-life-settlements.pdf
http://www.prlog.org/10936658.html
http://www.prlog.org/10936658.pdf
Visit http://www.freecpe.org/ for more information
Integrity Life Solutions spotted at Society of FSP - North Jersey Chapter meeting
Susan Lubin, CFP of Integrity Life Solutions attended the following meeting today
Bonny Rafel, Esq. presents: Disability Insurance From Application to Claims Management
This breakfast meeting qualifies for TWO continuing education credits for NJ DOBI, PACE, CFP(tm) and CPE for CPA's.
Discussion Topics included:
This is the opening meeting for an exciting year of programs. Please contact sfspnnj@att.net if you have any questions, or go to our website at: www.sfsp.net/northjersey for more information.
Integrity Life Settlements is a life settlement and viatical settlement broker located in Maplewood NJ
Visit http://www.freecpe.org/ for more information on life insurance settlements
Bonny Rafel, Esq. presents: Disability Insurance From Application to Claims Management
This breakfast meeting qualifies for TWO continuing education credits for NJ DOBI, PACE, CFP(tm) and CPE for CPA's.
Discussion Topics included:
- The role of the agent/broker in the sale
- Types of individual disability policies and limitations
- Disability definitions and continuity issues
- Handling disability claims, overview, responsibilities processing
- Buyout of the claim, denials, terminations, litigation pitfalls and much more
This is the opening meeting for an exciting year of programs. Please contact sfspnnj@att.net if you have any questions, or go to our website at: www.sfsp.net/northjersey for more information.
Integrity Life Settlements is a life settlement and viatical settlement broker located in Maplewood NJ
Visit http://www.freecpe.org/ for more information on life insurance settlements
Wednesday, September 15, 2010
Deconstructing the Life Settlement Application - Understanding the life settlement process
Most life insurance settlement brokers have similiar looking applications
There must be a reason for that ?- Well not suprisingly there is
To start the life settlement process every life settlement broker needs some basic information about their senior insured client and policy holder - otherwise known as the viator or settler
Oh by the way only the owner of the life insurance policy can sell the policy to a viatical & life settlement provider. If you are the insured, but not the owner, your consent to the transaction will be required if the sale involves an examination of your medical records.
To view Integrity Life Solutions life settlement application click here
To attend Integrity Life Solutions free webinar and possibly earn continuing education credits - if you are a CPA, accountant CFP, or NJ life insurance agent - visit us at http://www.freecpe.org/ for more information
Integrity Life Settlements is a life settlement and viatical settlement broker in Maplewood NJ
The first question on your typical application is the name of the insured
Sometimes the insured is also the policy owner
But that is not always the case
Why is the insureds name important?
Well perhaps youve seen the case previously and it didnt qualify for a life settlement offer
You as a life settlement broker would want to consider, before undertaking the life settlement process, if there have been any changes in circumstances that would improve the chances for a settlement
Perhaps another life insurance settlement broker has submitted the case. Assuming you have a complete application you can find out if the case has been shopped to the typical list of life settlement providers,
and save yourself the money of underwriting the case.
Life insurance agents and senior clients rarely realize the high cost of processing a life settlement submission - which includes the cost of medical records and life expectencies.
In our next post well include the importance of knowing the senior clients social security number, date of birth, and home address
Remember visit http://www.freecpe.com/ for more information or to register for our next free webinar
There must be a reason for that ?- Well not suprisingly there is
To start the life settlement process every life settlement broker needs some basic information about their senior insured client and policy holder - otherwise known as the viator or settler
Oh by the way only the owner of the life insurance policy can sell the policy to a viatical & life settlement provider. If you are the insured, but not the owner, your consent to the transaction will be required if the sale involves an examination of your medical records.
To view Integrity Life Solutions life settlement application click here
To attend Integrity Life Solutions free webinar and possibly earn continuing education credits - if you are a CPA, accountant CFP, or NJ life insurance agent - visit us at http://www.freecpe.org/ for more information
Integrity Life Settlements is a life settlement and viatical settlement broker in Maplewood NJ
The first question on your typical application is the name of the insured
Sometimes the insured is also the policy owner
But that is not always the case
Why is the insureds name important?
Well perhaps youve seen the case previously and it didnt qualify for a life settlement offer
You as a life settlement broker would want to consider, before undertaking the life settlement process, if there have been any changes in circumstances that would improve the chances for a settlement
Perhaps another life insurance settlement broker has submitted the case. Assuming you have a complete application you can find out if the case has been shopped to the typical list of life settlement providers,
and save yourself the money of underwriting the case.
Life insurance agents and senior clients rarely realize the high cost of processing a life settlement submission - which includes the cost of medical records and life expectencies.
In our next post well include the importance of knowing the senior clients social security number, date of birth, and home address
Remember visit http://www.freecpe.com/ for more information or to register for our next free webinar
Thursday, September 9, 2010
Wednesday, September 8, 2010
Wednesday, September 1, 2010
Free CPE credits
www.freecpe.org
Do you need CPE credits but cant find any interesting or relevant topics
Integrity Life Solutions (www.integritylifesettlements.net) offers 2 free CPE credits on the basics of Life Settlements
Life Settlements (life insurance settlements; senior settlements, senior life settlements) is a secondary market for senior life insurance policies
When it comes to cash flow, most seniors don't think about their life insurance policies, except to stop paying premiums and letting their policies lapse, or, surrendering their policies for the cash value. Now, for those that qualify, there's a Third Choice . . . Life Settlements - a Superior Alternative to Maximize Values in the Disposition of a Life Insurance Policy
To register please call 973-275-1110 and ask for Susan
or visit us at www.freecpe.org
Take advantage of these free CPE credits today
www.freecpe.org
Do you need CPE credits but cant find any interesting or relevant topics
Integrity Life Solutions (www.integritylifesettlements.net) offers 2 free CPE credits on the basics of Life Settlements
Life Settlements (life insurance settlements; senior settlements, senior life settlements) is a secondary market for senior life insurance policies
When it comes to cash flow, most seniors don't think about their life insurance policies, except to stop paying premiums and letting their policies lapse, or, surrendering their policies for the cash value. Now, for those that qualify, there's a Third Choice . . . Life Settlements - a Superior Alternative to Maximize Values in the Disposition of a Life Insurance Policy
To register please call 973-275-1110 and ask for Susan
or visit us at www.freecpe.org
Take advantage of these free CPE credits today
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