Speaker 1 (00:07):
Hello, I’m Bill Borsema of OC Consulting Group, a life insurance consulting practice. Back in the day, the life settlement market was as crazy as the Wild West funders were making insane offers on anything you’d throw in front of them. Then with the financial collapse and significant changes in life expectancy calculations, things changed dramatically and the market largely dried up. Fortunately, for policy owners today, the market is alive and well, and I’ve worked recently on multiple situations where policy owners have been well served by the existence of a currently thriving life settlement market. As an introduction, a life settlement is a sale of a life insurance policy to a third party, generally an institutional investor. For investors that are strategic reasons, they want life insurance and diversified portfolios. For policy owners, there could be numerous reasons to evaluate a life settlement. Maybe they just don’t need it anymore, or maybe they can’t afford it.
Speaker 1 (01:07):
Maybe cash today is simply worth more than a death benefit. Tomorrow. The bottom line is life changes, needs change, and options are good. Though some policies are more attractive to the market than others in the right circumstance, we can be looking at single life or survivor life policies, whole life, universal life, variable term insurance, you name it, the bullseye of the target market are low cash value. Universal life policies, single life contracts on individuals with life expectancies, not exceeding 10 years. While these policies are most attractive, don’t take anything for granted and pick up the phone and ask questions in any situation. A recent example was a business owner with a $3 million policy with almost no cash value. That was months from lapsing, we brought it to the market and got over a million dollar offer. In another case, a simple term policy with no cash value was gonna be allowed to lapse in the right situations.
Speaker 1 (02:11):
Even term policies can be brought to the market for value. Not everybody’s gonna be interested in this, and maybe they’ll even say no to a good offer, but in most situations this is something that should be discussed and analyzed. This is an area where there definitely are naysayers, but in my experience, this is largely coming from a perspective of ignorance or from somebody whose self-interest is put ahead of the client’s interest. Sometimes the insurance or financial advisor works for a company or broker dealer that prohibits them from dealing in life settlements. Again, this is usually from a point of self-interest more than in other areas. This is a market where expertise and character are of utmost importance. It’s why I’m here. Let me know what I can do to help.