A Life Settlement is the sale of an existing life insurance policy to a third party.
Typically, policyholders selling their policies are senior citizens with premiums that they can no longer afford or with an unwanted or unneeded policy.
The selling policyholder receives a payment that is higher than the policy’s cash surrender value but less than its death benefit.
The policy’s buyer pays all future premiums.
Once the transaction is complete, the ownership is transferred to the buyer, who becomes the owner and beneficiary. The original policyholder’s beneficiaries will no longer be entitled to benefits upon the original policyholder’s death.
A Life Settlement is the sale of an existing life insurance policy to a third party.
Typically, policyholders selling their policies are senior citizens with premiums that they can no longer afford or with an unwanted or unneeded policy.
The selling policyholder receives a payment that is higher than the policy’s cash surrender value but less than its death benefit.
The policy’s buyer pays all future premiums.
Once the transaction is complete, the ownership is transferred to the buyer, who becomes the owner and beneficiary. The original policyholder’s beneficiaries will no longer be entitled to benefits upon the original policyholder’s death.
Life Settlements were established at the beginning of the 20th century by a patient who lacked sufficient funds to undergo surgery and used his life insurance policy as payment to the surgeon. When this transaction was challenged in court, in the case known as Grigsby v. Russell, the U. S. Supreme Court ruled that a life insurance policy is, in fact, a private property and may therefore be sold and its ownership transferred.
Life Settlements were established at the beginning of the 20th century by a patient who lacked sufficient funds to undergo surgery and used his life insurance policy as payment to the surgeon. When this transaction was challenged in court, in the case known as Grigsby v. Russell, the U. S. Supreme Court ruled that a life insurance policy is, in fact, a private property and may therefore be sold and its ownership transferred.
Because of a low correlation to the erratic stock market and insurance carriers’ consistently highly-rated credit, this type of investment was attractive to investors who wanted to diversify their portfolios with investments outside standard markets.
Because of a low correlation to the erratic stock market and insurance carriers’ consistently highly-rated credit, this type of investment was attractive to investors who wanted to diversify their portfolios with investments outside standard markets.
Regulations provided the first line of defense, yet many policyholders and small investors did not have the knowledge, means, and skills to conduct a proper investigation when selling or purchasing a life insurance policy. Additionally, frequent exploitation of seniors and a lack of transparency in the Life Settlements Market resulted in a deficient market. Rather than deal with this broken market, many policyholders chose to lose money by surrendering their policies or allowing them to lapse and many investors passed on a great investment opportunity.
Regulations provided the first line of defense, yet many policyholders and small investors did not have the knowledge, means, and skills to conduct a proper investigation when selling or purchasing a life insurance policy. Additionally, frequent exploitation of seniors and a lack of transparency in the Life Settlements Market resulted in a deficient market. Rather than deal with this broken market, many policyholders chose to lose money by surrendering their policies or allowing them to lapse and many investors passed on a great investment opportunity.
Things have changed, and Life Settlements are now safer and more accessible than in the past. Now, thanks to the flow and distribution of information and current technology, we are able to remove the obstacles and simplify this process, delivering transparency and flexibility to policyholders and allowing them to maximize their asset’s value. On the flip side, we can provide small and medium investors easy access to the Life Settlements Market in a manner that is transparent and very profitable.
Cash (surrender) value – the sum of money an insurance company pays to a policyholder in the event that their policy is voluntarily terminated before its maturity.
Face amount – the amount of money that is paid when the policyholder dies or when their policy matures.
Premium “illustration” – a set of projections, prepared by the actuarial department of the insurance company. It shows how your policy will perform in the future. It includes financial projections for each year.
Premium optimization – an arrangement under which only the premium is paid without the savings element, which causes significant fluctuations in the premium rate.
Life expectancy – a statistical measure of the average time a person is expected to live, based on the year of their birth, their current age, and other demographic factors including gender.
Over 100,000 policyholders, who own policies with combined face values of more than 100 billion dollars, allow their policies to lapse every year.
Every year, policyholders lose 8.8 billion dollars in residual policy value that they could have received through Life Settlements.
Life Settlements payments average seven times more than a policy’s cash surrender value.
Policyholder – a person or persons who own a life insurance policy.
Life Settlements Investor – an individual or group of individuals who purchase life insurance policies from policyholders.
Life Settlements financial firms – firms engaged in Life Settlements investments. Regulations prohibit direct buying from policyholders – companies may only buy through providers.
Life Settlements broker – a state licensed agent representing sellers in Life Settlements transactions.
Life Settlements provider – a state licensed agent representing buyers in Life Settlements transactions and handling the procedure of ownership transfer.
Life expectancy provider – actuarial firms engaged in life expectancy evaluation.
Pricing provider – policy pricing firms.
Legal firms – law firms specializing in Life Settlements.
Trust services – assets are usually held by trust services.
Consultants – these are usually people who support the policy sellers but do not have a broker’s license.
Industry services – firms that provide various ancillary services in this industry.
LiST – a new Fintech firm that brings together policyholders and investors in the Life Settlements Market in a way that is more transparent and more beneficial to all parties.
Disclaimer:
Neither List Funding Inc nor its affiliates and subsidiaries (collectively, “List”) are registered as a licensed broker-dealer and/or as Life Settlements brokers or provider. List does not advise on any sort of investment and does not make any representations or warranties as to the legality of any investment. All decisions to invest are the sole responsibility of the individual investors. Moreover, List does not provide financial, legal, accounting or tax advice. Such advice, including investment advice, should be obtained from professionals who understand the ramifications of investments such as those featured on the List website. The information on our website and/or in any other materials supplied by List do not purport to include all of the information necessary to evaluate an investment and are qualified in their entirety by the terms of any offering materials along with the transaction documents (i.e., form of subscription agreement, terms and conditions, etc.) that are associated with an investment. No offer or sale of any securities will occur without the delivery of confidential offering materials and related transaction documents. Accordingly, the List website is merely intended to provide general information and is intended for initial reference purposes only. There may be advantages and disadvantages that vary depending upon the circumstances of a particular case, and nothing on the List website and/or other materials is intended to be relied upon by any prospective investor. Neither the Securities and Exchange Commission nor any federal or state securities commission or any other regulatory authority has recommended or approved any investment or the accuracy or completeness of any of the information or materials provided by or through the List website.
Private placements on List are intended for accredited U.S. resident investors and for sophisticated investors residing abroad in jurisdictions where securities registration exemptions are available. Securities sold in private placements are not publicly traded, are subject to holding period requirements, and are intended for investors who do not need a liquid investment. Private placement investments are NOT bank deposits (and thus NOT insured by any federal governmental agency), are NOT guaranteed by List or any other party, and MAY lose value. Investments of this sort are speculative and involve a high degree of risk and those investors who cannot afford to lose their entire investment should not invest.
This disclaimer is further qualified by, and subject to, List Funding’s
Looking to invest in the Life Settlements Market in an efficient and transparent way
Looking to eliminate monthly premiums and maximize asset value
