Solid 2010 for Life Insurance Settlement Industry

As 2010 winds down, officials from The Lifeline Program looked back on the past year, noting that the last 12 months turned out to be a solid year for the life insurance settlement industry.

While 2009 was one of the worst-ever for the life settlement industry, participants witnessed a major rebound for companies in 2010..

One industry expert noted that a “crisis of confidence” split among agents, brokers and sources of funding has mostly gone by the wayside.

As many well-recognized institutional players have come into the marketplace, the same expert believes there will be continued industry growth in 2011.

During the middle of 2010, the Lifeline Program reported it had begun a new funding initiative to allow the company additional purchasing power and the ability to aggregate life settlement portfolios.

Going into 2011, company executives have unveiled several predictions.

First, they believe that new insurance industry regulations, which require life insurers’ to alert policyholders regarding options like life settlements, will start taking hold.

Secondly, they also expect growth in so-called “term-to-perm” transactions, whereby term insurance policies are converted to permanent policies and then sold to life settlement providers.

Other experts have noted that 2010 has seen a noticeable alteration in the policies coming in to offices for review.

As a whole, policies featuring better characteristics for life settlements are coming forth. Experts attribute this to two key factors:

First, there is a change in agent attitude as it relates toward the industry. This is due to the fact confidence is coming back. The “manufactured” life settlements that pervaded the market not that long ago are now history. Also, agents who went out looking for clients to sell non-recourse premium-financed policy schemes are also gone.

As it stands today, the sources for policies are traditional agents who have come back to offering life settlements for their clients.

The other factor is a switch that can be linked to the agent force.

Due to the fact a number of companies are dealing with traditional agents, those having long-standing client relationships who are counseling their clients regarding life settlements, company heads are witnessing a flow of policies much better suited to life settlements.

Policies, those of which fit into the traditional box of “no longer being needed by the policyholder” are available, as opposed to those being acquired for the simple reason of selling down the road. As a reminder, the top policies for life settlements would be those owned by seniors who no longer have a need or can afford them.

Key-man policies, those owned by companies on the lives of executives who are no longer in their employ, also have helped to boost the market.

Looking to 2011, the overall aspirations of the industry stay the same as when the year began. Provider companies need to continue to exercise more control of their capital, and their overall goals need to line up with that capital.

Experts point out that transparency of transactions, and entire disclosure of fees and commissions, need to continue due to the fact they bolster our legitimacy. Provider companies need to continue to present unimpeachable evidence of funds at the time offers are made.

According to some in the industry, 2011 is already being tabbed the year of the Golden Boomers as additional seniors start the retirement process and look for alternative means to fund their boomer lifestyle.