Bell, Paul D

Description

The Life Settlement industry is growing exponentially ( www.conningresearch.com ). Life Settlements offer opportunities for investors and consumers alike. However, there is a great deal to know about this new industry. Laws and regulations are being discussed by state insurance departments across the nation. Ethical considerations present a challenge for all involved in the industry. The future will bring new investment opportunities that utilize Life Settlements. In addition, owners of life insurance will have new opportunities in the secondary market. It is estimated that life settlements provide an average of seven million dollars a day to seniors in need of cash ( The Basics of Life Settlements, Life Insurance Settlement Association (LISA), 2008). This website publication is intended for informational purposes only. The tone of the information is intended to be even-handed, presenting facts and providing reference resources. The information is not intended to act as a solicitation to buy or sell a Life Settlement. If you would like information about purchasing a Life Settlement or selling your insurance policy, please contact Dr. Bell directly to set up an appointment. Email and phone information can be found on the contact tab. Overview A Life Settlement is the sale of an existing life insurance policy for a price less than the face amount, but greater than the cash value. The Seller gets immediate cash and the investor takes responsibility for paying premiums. The investor collects the death benefit upon the demise of the insured. Many senior life Settlors are over the age of 70. Ethical considerations arise for several reasons. The first is the connection between death and profit. Investing has traditionally connected prosperity with profit. Another ethical consideration is the disparity that can exist between the profit made by the investor and the cash paid to the policy Seller. These issues are addressed in the 'Laws and Ethics' section. Changes in Life Settlement law are moving so fast that it is hard to keep up with the changes, even with the speed of the Internet. For instance, the IRS recently published the Revenue Bulletin 2009-13 to clarify tax issues with Life Settlements. State and Federal laws are also being changed and considered for change on a monthly basis. Selling a policy to create a Senior Life Settlement is something that is growing in popularity with consumers. This is made evident by the fact that the industry is creating billions of dollars of transactions each year and growing by leaps and bounds. However, there is not a readily visible market and selling a policy is fraught with stumbling blocks. A Seller should be aware of the difference between a broker and an agent. An agent works for the best interests of the Seller. A broker works for his/her own best interests. When a Seller contacts an out of state Broker or a Provider of Life Settlements, he is not represented in the transaction unless a local agent has been appointed by the Seller. The Seller may never know the actual price offered for the Policy by the Provider since a Broker is not obligated to full disclosure. The section titled 'Selling an Insurance Policy' should provide useful information for someone contemplating this transaction. Because Life Settlement investment returns are not contingent upon interest rates or changes in equity prices, investors are drawn to their unique attributes. However, this does not mean Life Settlements carry no risk or investment limitations. The tab titled 'Investing in Life Settlements' outlines some of the risks associated with this investment. Plus, calculating an expected return presents unique problems. Each of these topics is covered in a different tabbed section. There is a primary essay in each section that outlines the main issues of the section. The left hand column contains topics of interest, recent news and other links. The material on this Website (excluding references and links) is copy righted by Paul D. Bell, Ph.D. and cannot be published, re-published or used in any form without written permission.

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