Questions on the Mind of an Advisor About Life Settlements

As Life Settlement Brokers, after speaking with many professionals nationwide who are looking into the life settlement market for the first time, we found that initially their two concerns were: how much work and paperwork is involved and who are the “investors” purchasing the policies, two very good and prudent questions.

The process is simple, straightforward and if you have a client’s policy you would like to have evaluated, it will only cost your client about 5-7 minutes of their time to fill out forms. Once the forms are received, we do the rest. We understand everyone is busy and has a job to do or a business to run and that is why we stand by our white glove approach. Genesis Handles everything for your client and keeps you fully informed as the process moves forward. The forms your client receives authorizes us to work on your clients policy. (Examples are, contacting the life insurance carrier to get updated policy information, gather medical records, obtain life expectancy reports etc…) Once we complete a full underwriting on the policy we then send it out to our multiple funding sources to procure the best possible offer the market will allow.

The life settlement market is regulated by each states insurance/banking/financial services appropriate authorities. To date, 41 states have life settlement regulations in place and Massachusetts’s Governor Deval Patrick signed a life settlement bill last month that will make Massachusetts the 42nd state effective April 2013. State regulations are enacted to protect the consumer’s best interest and protect their rights and confidential information. The regulations apply to everything from: how long a policy must be in force before it may be settled, various documents and forms, rescission periods and disclosures, just to name a few. Providers – the entities that are licensed to effectuate a contract with a policy seller and who represent the capital sources must be licensed to conduct business in a particular state. Brokers as well are required to be licensed and have a fiduciary responsibility to the policy owner. Not every provider is licensed in each state, for example a state like Florida may have fifteen or so providers and a state like NY may have thirty. Funds which provide capital to the providers may include: investment banks, hedge funds, family office groups, private equity groups, pensions, special purpose vehicles etc…

A life settlement is a “no brainer” alternative to lapsing or surrendering a no longer needed, wanted or affordable life insurance policy. The process is simple and can make a substantial difference in one’s life. The transaction is also a regulated transaction in most states and that should serve as a clear comfort for both sellers and their advisors.