Life Settlements in a Time of Crisis
Your Life Settlement Marketing Organization
LIFE SETTLEMENT Opportunity
FLIGHT TO SAFETY 1. Life Settlements are a flight to safety as an asset during economic crisis. 2. Life insurance is “uncorrelated” from economic conditions because death benefit values are guaranteed. 3. A $100,000 death benefit has not changed from last month to today to next month no matter what is going on around us. 4. For any seniors struggling financially, the life settlement option could be a better move than: • Lapsing or surrendering a policy • Liquidating investments or assets in a down market and locking in losses
OPPORTUNITY HELPING THOSE IN CRISIS This is also an opportunity for agents/advisors: • A financial solution that agents can bring to their clients right now during a crisis. • The settlement is for a policy their client already owns and has made premium payments on for years. • There are no fees to do a life settlement—there are no out of pocket costs. • When a person settles their policy, the policy owner receives cash which can often be tax-free, and they are no longer responsible for premium payments. • The process can be completed from start to finish in 90 days or less. • The entire life settlement process is conducted remotely and there is no need for in person meetings at any time.
2018 LIFE SETTLEMENTS PURCHASED
3.8
$
B
28% increase over 2017
*The Deal, May, 2019”
LIFE INSURANCE STATS
150 million life insurance death benefits in-force today totaling $12.3 trillion. “2016 Life Insurers Fact Book”, American Council of Life Insurers
Nearly 9/10 universal life insurance policies never pay a claim because they are lapsed or surrendered. “Lapsed Based Insurance�, The Wharton School, The University of Pennsylvania, 2014
LIFE INSURANCE LAPSE & SURRENDER
684
$
B
Annually
*ACLI Life Insurance Fact Book 2018”
MARKET
230
$
B
Annual Estimate 2017-2026*
*Conning: “Life Settlements: Steady Growth, Growing Potential 2017”
2018 LIFE SETTLEMENTS PURCHASED
3.8
$
B
*The Deal, May, 2019”
WHO QUALIFIES FOR LIFECARE XCHANGE?
Insured Age 65+
Universal Life, Term Conversion, Whole Life
Health Condition Impaired
$100,000 Face Value
CASE STUDY* Insured: 80-Year-Old Female with Impaired Health (LE range sub-10 years) Insurance Policy Universal Life
Policy Benefit $1 Million
Market Value
$250,000 Industry Average
Annual Premium $30,000
Cash/Surrender Value $20,000
* Hypothetical Case
EVOLUTION OF SETTLEMENTS
Oliver Wendell Holmes U.S. Supreme Court Grigsby v. Russell, 1911
A life insurance policy is legally protected as personal property by the US Supreme Court and the policy holder has the right to sell the policy for value.
MODERN REGULATION
45
D
states are regulated, which covers
90
D
D
%
of the U.S. Population.
D
D
D
MD/D
MD
D – Disclosure MD – Medicaid Disclosure
SECONDARY LIFE MARKET: REGULATION
• July 2017 • Innovation Sub-Group • Private Market Options for Long-Term Care Services
LTC FUNDING- CONGRESSIONAL ACTION H.R. 5958, “Senior Health Planning Account Act” Bi-partisan bill introduced into House of Representatives Change to IRS Tax-Code creates tax-free Long-Term Care Accounts funded by a life settlement Estimated savings to taxpayers of $2 billion over next decade. Alliance for Senior Health Care Financing
PUTTING SETTLEMENTS INTO ACTION
LIFE SETTLEMENT MARKETING ORGANIZATION (LSMO)
Lead Referral
No Additional Licensing
E&O Coverage Provided
Marketing Materials and Back Office
Referral & Term Conversion Comp
SOLUTIONS FOR EVERYONE Life Settlement Product Lines
Speed Settlement (Non-Underwritten)
LTC Settlement (LTC-HSA)
Reverse Settlement (Whole Life-CSV) Traditional Life Settlement
Viatical Settlement (Terminal)
AGENTS CAN HELP POLICY OWNERS USING TWO STRATEGIES Retail Integrate into marketing, communications, and networking to find clients with a policy
A New Profit Center to help Senior Clients
Wholesale Book of Business Policy Review to find qualified policies
RECENT CASE STUDY Policy Owner – Male, Age 74 Health Conditions – Impaired Risk/Cancer (in-remission) Policy Type – Term Convertible Policy Benefit - $1,400,000 Settlement Market Value - $350,000 Total Comp - $125,000
CASE STUDY: INDIVIDUAL POLICY REVIEWS Policy Minimums: Age 70+/$100k
25
Qualifying Health Status
12
Offers Accepted (to date)
4
Settlement Value Comparative Surrender Value
$625,000 $60,000
Referral Comp
$125,000
Term Conversion Comp
$225,000 Illustrative Sample
CASE STUDY: BOOK OF BUSINESS – POLICY REVIEW Policy Minimums: Age 70+/$100k
650
Qualifying Health Status
129
Offers Accepted (to date)
24
Settlement Value Comparative Surrender Value
$3,400,000 $78,000
Referral Comp
$262,500
Term Conversion Comp
$475,000 Illustrative Sample
INFORCE ILLUSTRATION & POLICY SUBMISSION FORM Submission Form • Policy owner info • Medical info, impairments, doctor and meds list
Policy Information • Copy of policy or policy statement • Premiums, loans, Cash Surrender Value • Ownership and Beneficiaries • POA? • Trust?
Turning opportunity into profits Chris@lcxlife.com www.lcxlife.com 561-886-4631