Impact of Life Settlements
As valuable as a life settlement transaction can be for a policyowner, many are unaware of the option. Instead, those who wish to terminate their policies have typically resorted to one of two options, both of which forego substantial value and ultimately benefit the insurance provider:
1) Surrender the policy: Redeem the policy for its cash value. Policyowners would get a sum of money from the provider and be relieved of paying further premiums. Unfortunately, most policyowners aren’t aware that they can sell their policies for significantly more value.
2) Allow the policy to lapse: Stop paying premiums and allow the policy to lapse. All the years of making monthly payments are rendered worthless and the value of the policy is forfeited. The majority of policyowners will simply stop paying their premiums, outright losing a valuable asset in a life insurance policy that could have generated a significant cash payment.
Offering a Better Option
We serve as allies to policyholders by offering them a true market value (as much as 4x or even 8x the cash surrender value), defending them from a disadvantaged, one-sided transaction with the insurance provider.
Most Policies Are Dropped
$200 billion worth of life insurance will lapse or be surrendered each year through 2027 — all of which could qualify for a life settlement and be pocketed by the policyowner.
Welcome Funds Survey, April 2020
Most Policies Will Never Pay
Nearly 88% of universal life policies ultimately do not terminate with a death benefit claim. In fact, 74% of term policies and 76% of universal life policies sold to seniors at age 65 never pay a claim.
Washington University in St. Louis & University of Pennsylvania, 2016
Most Policyowners Aren't Aware
More than 38% of individuals who sold their life insurance policies in life settlement transactions last year said they were planning to lapse, cancel or surrender their policies until they learned of the life settlement alternative.
Crutches for Crises
From 2006 – 2009, consumers netted $5.62 billion more cash from life settlements than the comparable amount being offered by the life insurance company – an average of 800% more value.