June 2011 Life Settlement Advisor

The Life Settlement Advisor
June 2011

This Month's Message

As we hit the middle of the year, we continue to see further evidence that the life settlement market is coming back. We have noticed that there has been a steady increase in the number of buyers and this is translating into a better marketplace for individuals who are looking to sell their policies.

With the continued unpredictability of the stock market (as of this writing, the Nasdaq is in negative territory for the year), we feel that life settlements are becoming more and more of a viable option for those that are thinking of retirement. In fact, many of those individuals are very concerned that they will not have enough money put aside to live comfortably during those years.

We are always confident in telling individuals and their advisors that if they have a life policy that they no longer need or want, a life settlement option is a much better choice than just letting the policy lapse or continue paying premiums. According to a United States Government Accounting Office report, on average, life settlements pay 8 times more than the cash surrender payout offered by insurance companies (source GAO - Report to the Special Committee on Aging, U.S. Senate July 2010).

A life insurance policy is an asset, much like a car or a house and can provide much needed revenue and peace-of-mind for those worried about outliving their means.

I would be happy to answer any questions you may have about this or any other life settlement topic. I can be reached at 888-849-0887 or llagrotte@lsa-llc.com.

Leo LaGrotte
June 14, 2011

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Factoid

44% of Americans born between 1946 and 1965 are not confident that they'll have enough money to live comfortably in retirement.

- Associated Press Poll, 2010

Latest News

Texas Legislature Passes Life Settlement Bill, Sends it to Governor

The Life Settlements Report, June 3, 2011

The Texas Legislature passed a life settlement bill that prevents stranger-originated life insurance (STOLI) and updates an earlier law regulating the market. The legislation, which was sent to Gov. Rick Perry on Monday, is based on a model act developed by the National Conference of Insurance Legislators (NCOIL) favored by the life settlement industry. More...

Busting the Myths Surrounding Life Settlement

International Adviser, May 16, 2011

Are life settlements too risky to handle? All investments carry risk. It's just important to understand where risk lies. In life settlements one of the main risks is that the fund manager underestimates life expectancy and so has to wait longer to receive the sum assured and pay more premiums in the interim. You need to understand how the provider meets that challenge. Continue...

Life Settlement Securities Get Raters' Attention

National Underwriter, March 4, 2011

More investors, arrangers and originators are asking rating agencies to look at securities backed by pools of life insurance policies. Analysts at Standard & Poor's Ratings Services, New York, have responded to the renewed interest by publishing a discussion of life settlement securitization risks. Organizers of a typical life settlement securitization use life policy death benefits to make payments on debt securities. Interest in life settlement securitizations flourished a few years ago, then cooled as investors and investment banks dealt with the effects of the credit crisis. Read more...

Company Announcement

Life Settlement Advisors has lined up a buyer that is interested in purchasing small-face life insurance policies in the range of $100K - $1M.

For more information, call Leo LaGrotte at 888-849-0887 or e-mail at llagrotte@lsa-llc.com.

Question of the Month

A financial advisor in Seattle, WA asks, "If my client wants to sell his policy, how is he protected?"

Answer: Life settlements are regulated on a state by state basis. Certain states require both the client's repesentative (Life Settlement Broker) and the buyer(Life Settlement Provider) to be registered with the state as a licensed entity. After the settlement proceeds have been disbursed to the seller, there is a 15 day rescission period in which the seller can request to have the changes reversed.

Case Study: Underperforming Universal Life Policy

Client: Male, 86 years old

Policy: $1,450,000 Universal Life Policy

Situation: After conducting a Policy Performance Review of a client's policy, it was discovered that his insurance benefit would run out at the age of 90, due to the poor performance of the policy.

Solution: By utilizing the life settlement marketplace, the client received an offer of $182,000 for his policy with which he used to fund a new, replacement life insurance policy. The new policy would have a lifetime guarantee, run to age 110 and cost $20,000 less annually than the premiums on his old policy.

Click here for more case studies.