Life Settlement Industry grows steadily.

In an interesting article in the Wall Street Journal, the Life Settlement industry was featured in a profile piece that discussed the rapid growth and controversy surrounding this unique market.

For the uninitiated, the Life Settlement business is one where brokers purchase life insurance contracts from policy holders who no longer wish to own their contracts, but don't want to cash them in or surrender the contracts. It is very similar to the factoring industry that is such a large part of the settlement industry and I can see how this new area is going to start to over lap the interests of the settlement industry as well.

You can read the entire WSJ article by clicking here.  

I see a lot of parallels to where the factoring business was about ten years ago, which is that it is largely unregulated, has little pricing control or consumer protection and big intermediaries are starting to enter it seeing big profits.

The over lap with the structured settlement industry is that just as with cashing in an annuity early, selling your life insurance contract early comes with substantial risk as it is an obscure market where pricing varies widely. As with most factoring deals, the policyholder would usually be better off hanging on the policy, but is induced to sell by needs for cash or ignorance. Settlement planners and brokers need to educate themselves on how this business works, it's draw backs and short comings, the regulatory issues involved and who to call when a client eventually contacts you about selling their contracts.

It's a great article, lengthy and well researched and well worth your time.  

Comments

[Will]

Mark- A good frined of mine runs a very reputable life settlement shop. If you are looking for someone to share a little insight, let me know and I will hook the two of you up.
Will

[The Settlement Channel]

Will,

Send him along. I'd be more then happy to talk with him.

MW

[Nick Barai]

As markets develop and become more efficient, the cost for participating in that market will decrease. An increased number of market participants naturally leads to more competitive prices, not only on the bid/ask spread but also for secondary services linked to that market.

In the settlements world insured tracking, premium management, and other services are currently being offered at outrageous fees. GIX Policy Services however, understands how markets develop and has set a new standard in these service offerings. GIC Policy Services is able to offer insured tracking, premium management, reporting, and death claim processing ofr HALF of the price of other service providers.

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[Carl Conte]

Over the past few years, the Life Settlement industry has grown and matured tremendously. By some estimates, over $12 billion of life insurance was transacted during 2007. This growth has generated many positive changes in the industry, including increased legislation, the utilization of technology and the development of best practices. However, this growth has also attracted many new entrants into the marketplace. This increasing pool of industry participants has muddied the waters for many insurance producers when it comes time to decide who to partner with. Similar-sounding companies peddling comparable propositions can create the appearance that everybody is the same. However, that appearance is misleading. Many of these new entrants lack the experience to handle the many intricacies and stumbling points within the process of a Life Settlement. With this business environment in mind, we are a 30yr old Publicly Traded organization with a large pool of private monies available, with the most competitive purchase pricing in the industry. Below is an outline of our “basic” parameters.

WE ARE LICENCED IN ALL STATES:

15% plus

Basic Parameters for Beneficial Interest “Contestable” Policies or Portfolios
• Over 75
• 150 max LE
• Non Premium Financed
• Universal Life Only

Basic Parameters for “Non-Contestable” Policies or Portfolios
• Over 70
• 180 max LE
• Non Premium Financed
• Universal Life Only

email me today at: cconte@brpg-inc.com