#5 - Senior Life Settlement Anatomy 101
Capstone Alternative Strategies is dedicated to Senior Life Settlement Education. Ok. Why should you care? It depends on which side of the fence you're on. Seller or buyer?
If you are a senior and you have an unwanted, unneeded or unaffordable policy, here are 5 Things you will want to know:- According to the Life Insurance Settlement Association (LISA), over $100 Billion in face amount of life insurance either lapses worthless or is surrendered every year by seniors over the age of 65.
- 90 Percent of seniors who let an insurance policy lapse would have contemplated selling it if they had known settlement was an option based on research compiled by the Insurance Studies Institute.
- Nearly half of all financial advisors providing advice and planning cite a lack of knowledge as the reason for not recommending settlement as an option to their clients.
- In a 2012 survey compiled by The Lifeline Program, research concluded amongst those surveyed that 79% of clients felt advisors should be knowledgeable of the industry and able to provide information about life settlements.
- The knowledge gap is so glaringly wide, in a follow-on study by the same group, 55% of seniors allowed their policies to lapse because they viewed it as a liability. Not an asset.
If you are an accredited investor and have an active interest in diversifying your portfolio, here are 5 Things you will want to know:
- Life insurance is an asset...not an investment. Investing implies that one puts money into equities, debt, real estate or some market-traded instrument with the hopes that it will appreciate in value over time. Life insurance says what it will be worth printed right on the face.
- Since the inception of the life insurance industry, there has never been a precedent set of a legitimate claim having failed to have been paid.
- A legal reserve life insurance company simply does not close its doors and go out of business declaring that all policies are null and void. Legal reserve life insurance policyholders enjoy personal security safeguards unknown by other types of businesses.
- Life insurance is highly non-correlated to most forms of risk. A Senior Life Settlement policy avoids market turbulence, geo-political events and other potential headwinds that can affect market-based investment instruments.
- Senior Life Settlements are a socially responsible investment. According to a 2010 research report conducted by the Government Accountability Office as reported in BusinessWire, seniors seeking to monetize their life insurance assets fare far greater under a settlement arrangement than with the options presently available through their life insurance carrier.
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