Jul 14, 2021
For agents and advisors who are under 50, the term “inflation” does not have a huge meaning beyond the textbook definition. Most folks from Generation X and younger did not experience the specter of inflation that haunted the 1970s – but their clients did. Many baby boomers, who are prime life settlement candidates, were coming of financial age in the ‘70s when prices and interest rates were out of control. High gas prices and mortgage interest rates get most of the histo...
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Jul 06, 2021
Many senior clients over 65 years of age aren't aware that a term life insurance policy (if convertible) can be sold on the secondary market for a significant cash payment. Using this strategy can be an effective method for qualifying seniors that don't need the coverage but are looking at ways to optimize the monetary value of the policy.
Finance professionals need to discuss these options with each senior client if their term life insurance is getting close to expiration. Not making them awar...
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Jul 06, 2021
The number of people 71 and older buying universal life insurance continues to rise in the United States. According to an activity report from MIB Group, the individual life insurance application volume went up by 11.7% from April 2020 to April 2021. Life insurance application activity also experienced an increase of 18.5% in March 2021.
MIB Group is an organization that works with insurers throughout the United States and Canada by providing information for life insurance underwriting. All of ...
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Jun 21, 2021
By Wm. Scott Page
Agents and advisors who are new to life settlements often ask about the difference between an application and a policy appraisal. Does one replace the other? Is an appraisal necessary? Which comes first? I would like to answer this by describing the three key differences between an application and an appraisal. And because everyone likes alliteration and cute wordplay, I have broken it down to three Ps: paperwork, process, and profits.
P is for Paperwork
Selling a life insur...
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May 27, 2021
Trying to interpret various tax codes isn't an easy task for most people. This is especially true with a life settlement tax. Several changes by the IRS even further complicates matters. Fortunately, the latest update is designed to simplify the entire process of working with life settlement companies.
Life Settlement Tax Treatment
Many people often ask, "Do you have to pay taxes on life insurance settlements?" The simple answer is yes, as a life settlement is taxable to the amount of pr...
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May 05, 2021
Buying life insurance is a great way to keep your family protected in the event of a tragedy. However, you may want to sell your life insurance policy eventually. You may no longer need the policy, or your policy is reaching near its expiration date. A life settlement is also another way to supplement your retirement. Keeping all of these things in mind is important if you are thinking about selling your life insurance.
What Is a Life Settlement?
A life settlement is simply the result of you s...
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May 05, 2021
Privacy issues have been at the forefront of the life settlement industry since it began more than 25 years ago. The industry pre-dates the landmark Health Insurance Portability and Accountability Act of 1996 (HIPAA), and from its earliest days, we have had concerns about the private information of policy sellers being mishandled during a life settlement transaction. And unfortunately, despite regulations like HIPAA and best practices that are adopted by many companies, the process of determinin...
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May 05, 2021
Identity theft is a major issue for people of all ages. However, elderly people are especially at risk, as one in ten Americans who are 65 or older and live at home will become victims of elder fraud. Understanding how to prevent identity theft is essential in keeping your assets well protected at all times.
Why Seniors Are More Likely to Experience Identity Theft
Many seniors tend to have greater net worth and access to more capital compared to younger people. All of these assets make elderly...
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Apr 09, 2021
It's no secret that insurance companies don't like the life settlement industry. When a policy is purchased as a life settlement, by definition it will be held until the policyholder passes away, and the insurance company will have to pay the death benefit. We know that insurance companies make most of their money when policies lapse, and it’s fair to say that if every life insurance policy was purchased as a life settlement, then the entire industry would collapse. At the moment, there&rs...
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Apr 02, 2021
By Wm. Scott Page
Becoming pre-qualified is all the rage. When we go to buy a car, we usually know whether or not we qualify to afford the payments. In the competitive world of residential real estate, if you're not pre-qualified for a mortgage, you're very likely to get shut out of bidding – particularly when the market starts to heat up like it is right now.
Why wouldn't you also want to pre-qualify your client’s insurance policy for a life insurance settlement? Agents and adviso...
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Mar 09, 2021
Purchasing life insurance is essential in giving financial security to your family once you pass away. You can choose between two different options, whether it's a whole life or a term life insurance policy. Understanding the difference between whole life insurance and term life insurance is important before you purchase a policy.
Whole Life Insurance
The premiums of whole life insurance are often much more expensive than term life insurance for a couple of reasons. First, whole life insurance...
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Feb 26, 2021
Life never remains idle, but it's constantly changing. The original need for buying life insurance coverage can easily change over time, as needing income replacement for young kids isn't necessary after retirement. These policies may also no longer be affordable, as low-interest rates and the rapidly changing equity markets having significantly impacted older policies.
One of the most simple ways to keep track of these changes is to conduct a policy review for you or your clients.
A policy re...
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Feb 22, 2021
The Tax Cuts and Jobs Act (TCJA) contain two provisions impacting life settlements. The TCJA expanded the estate tax exemption while also changing how life settlements are taxed. Both of these changes created a renewed level interest and research for agents and consumers. Avoiding a lot of the industries known pitfalls like the releasing of private information and lengthy time wasted between applications, medical reviews and generating settlement offers, agents can now prequalify a senior client...
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Feb 19, 2021
Last spring at PolicyAppraisal.com, we wondered aloud about what effect the Covid-19 pandemic would have on life insurance policies. Sadly, we knew that many people were going to succumb to the coronavirus and that this would likely have an impact on life expectancies and how insurance companies view individual policyholders. At the time, we spoke to several agents, representing large institutions, and the typical response was that the wheels of change turn very slowly in the life insurance worl...
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Feb 01, 2021
Any financial adviser or insurance agent who's reading this post should stop what they're doing right now, and start developing a plan to reach out to every person that they have ever sold a term policy. Dig into your files and find all your term clients, and quite honestly, the older the policyholder the better. What you are looking for is “found money.” One of the best financial opportunities available to many seniors right now is what we call a term-to-perm-to-life-settlement tran...
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Jan 13, 2021
Financial advisors spend a great deal of time studying market trends and learning about the best ways to manage money for their clients: understanding stock market history, teaching the magic of compounding, and explain the present value of money, among many others. I applaud them for their diligence in helping people save money for retirement and making sound, long-term plans. But when I speak to financial advisors and ask them to identify the biggest financial mistake a senior can make, almost...
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Jan 12, 2021
Insurance agents and financial advisors fill many roles for their clients. Of course, they offer financial advice, but they also are asked about accounting and tax questions. Sometimes they also act as business coaches and even amateur psychologists. As we enter the new year, the economic situation for many will get tougher, and clients will have many questions for their advisors. It will be particularly challenging for folks on fixed incomes and small business owners. Things will probably get w...
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Nov 06, 2020
More than 25 years ago when we first started working in what would become known as the life insurance settlement industry, it was a brave new world. Most insurance agents didn't understand how the industry worked or how secondary market pricing was determined. Many agents and advisors didn't know if life settlements were legal while big insurance companies tried to regulate us out of business.
Well, it was and still is legal, but times have changed, particularly as it relates to how long it ta...
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Nov 06, 2020
Last spring at PolicyAppraisal.com, we wondered aloud about what effect the Covid-19 pandemic would have on life insurance policies. Sadly, we knew that many people were going to succumb to the coronavirus and that this would likely have an impact on life expectancies and how insurance companies view individual policyholders. At the time, we spoke to several agents, representing large institutions, and the typical response was that the wheels of change turn very slowly in the life insurance worl...
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Oct 20, 2020
COVID-19 turned all of our lives upside down and caused varying levels of mental, emotional, and economic strain. Months after the initial lockdowns, people and businesses are still feeling the effects – and it's having an impact on life insurance.
Options if your client can’t afford premiums
First, let's talk about what to tell clients who can't afford to pay their premiums. As the pandemic wears on, times are getting tough and many individuals are facing fina...
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Sep 17, 2020
Understanding how long a client may live is a key factor in financial planning, and this should influence how much and what type of life insurance is recommended by agents. Most individuals may think about their longevity when they first purchase insurance, and then they forget about this aspect of their plan and leave their life insurance on autopilot. They see monthly payments being debited from their account, knowing that they are protecting their loved ones, family members or other beneficia...
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Aug 29, 2020
5 Top Reasons for Life Policy Appraisals that Take Advantage of Inappropriate Coverage.
For insurance agents who haven’t yet counseled their clients about life insurance policy appraisals, here are the five top reasons to recommend an appraisal today.
If a client is planning to let a policy lapse. If a client is considering letting a policy lapse, it turns into a huge lose-lose scenario for the agent. First, the agent will stop earning residual income on the policy, and s...
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Jul 20, 2020
When we first started working with the life insurance industry, it was utterly dominated by paper. Getting any information from an insurance company took seemingly forever, often requiring multiple conversations and repeated attempts to get information. The same was true when securing medical records and trying to get applications completed. Some months it seemed like our FedEx and postage bills were higher than our rent.
Thankfully, technology has changed a lot of the issues which slowed down ...
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Jul 17, 2020
We all know that residuals are the lifeblood of the life insurance industry. Agents work incredibly hard to sign-on clients, knowing that if they play their cards right and build a nice book of business over time, residuals will help them grow their wealth.
However, when times are tough, like now, clients are looking at their bills and wondering if they should continue to pay their life insurance premiums. Maybe they have lost income, or their spouse or a family member has had a setback. Everyo...
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Jul 02, 2020
The coronavirus pandemic has sent shockwaves through economic markets across the globe. Many retirement accounts have taken significant hits, and it remains unclear what the impact might be on other key assets like real estate holdings. Even the employment prospects have changed for some seniors and others who thought they were in stable industries. Quite frankly many individuals who thought they might be retiring soon have to perform a complete re-evaluation of their retirement plans.
In order...
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May 07, 2020
Even in times of financial stability, aging clients with maturing term policies have a huge decision to make. Do I convert my term policy to a permanent policy at staggering premium rates? What happens in times like these? How much more difficult is this decision after businesses have been closed for nearly two months? How much more difficult is this decision when investment portfolios have taken 10%, 20% or 30% hits?
What if there were an alternative solution? What if that alternative solution...
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May 07, 2020
While average financial advisors have all but given up on succeeding in 2020, astute advisors like you know that the sky is the limit when it comes to gathering Assets Under Management (AUM) during the remainder of the year.
While the COVID-19 pandemic has negatively impacted America’s financial markets as it has upset many of America’s businesses, it has also provided us with tremendous opportunity. Ironically, John F. Kennedy once said “When written in Chinese, the word &lsq...
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Apr 24, 2020
LIMRA, the Life Insurance Marketing and Research Association conducted a survey of American and Canadian life insurers to assess the effect of the global pandemic on business practices. In all, 47 U.S. carriers were surveyed to see if any changes were being made as a result of state and federal social distancing guidelines and 12 Canadian carriers were surveyed to see if parliamentary and provincial guidelines necessitated any changes.
The survey found that there were no significant changes in ...
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Apr 24, 2020
U.S. life insurers are deciding not to gamble on older Americans during the coronavirus (COVID-19) crisis by temporarily suspending applications from certain age groups or imposing tougher requirements. Insuring older Americans can be a big risk for U.S. life insurers under the best of circumstances, but it brings in hefty premiums. But the risk involved with insuring older Americans during a world pandemic is expected to bring changes to the industry. The biggest shift may occur first on the mo...
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Apr 12, 2020
One of the most widely anticipated provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act is the one-time stimulus checks promised to Americans in the coming weeks. But many isolated seniors have been left understandably confused and nervous about whether and how they will receive money, or their retirements will be affected. Financial advisors have never been more important to their clients than they are right now. With America caught in the throes of a worldwide pandemic,...
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Apr 12, 2020
Since 1989 we’ve completed thousands of policy appraisals and provided policyholders with access to hundreds of millions of dollars in cash. We’ve also paid out the most aggressive referrals fees in the business to life insurance agents and financial advisors.
Every member of our management team has in excess of 30 years of experience in policy appraisals. We have routinely provided expert witness testimony in both state and federal courts for decades. We are called to testify as ex...
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