LIFE SETTLEMENTS
Driving revenue while fueling the 3Rs
A policy owner is always better off to get the highest value for their asset over potentially lapsing or surrendering their policy for far less .
Life settlements have been part of the insurance industry for over three decades . Thanks to the media and online advertising , more policy owners than ever before are aware of life settlements and the use of it to fund long-term care , and the growth of advisors incorporating life settlements into their practice .
Life settlement market growth has continued at a steady pace for the last 5 years with the only slowdown being in 2021 because of concerns around COVID . Now in 2022 , the Life Settlement market is experiencing a strong bounce-back with the potential for its biggest year ever .
FACE AMOUNT POLICIES
2017 |
$ 2.8B |
2,027 |
2018 |
$ 3.8B |
2,587 |
2019 |
$ 4.4B |
2,878 |
2020 |
$ 4.6B |
3,241 |
2021 |
$ 3.9B |
2,937 |
Regulation and consumer protection
Chris Orestis , CSA , is President of Retirement Genius , a nationally recognized financial , health / LTC , and retirement issues expert . Over 25 years ’ experience in insurance and long-term care , he ’ s credited with pioneering the Long-Term Care Life Settlement over a decade ago .
Today ’ s life settlement is a well-regulated financial transaction providing a number of consumer benefits that in particular can help seniors struggling with the unique financial challenges of aging and declining health . Forty-five states have life settlement and / or viatical regulations in place covering 90 % of the U . S . population . Michigan and New Mexico regulate viatical settlements only ; while Alabama , Missouri , South Carolina , South Dakota , Wyoming , and Washington , D . C . have no specific life settlement regulations currently in place .
Laws have been introduced in the states to mandate disclosure to policy owners about their legal right to a life settlement and uses for long-term care , both the National Council of Insurance Legislators ( NCOIL ) and the National Association of Insurance Commissioners ( NAIC ) have endorsed life settlements to pay for long-term care . Soon after , Congress followed up by introducing H . R . 5958 , the “ Senior Health Planning Account Act ”, a bi-partisan bill to create an LTC-HSA as a tax-free vehicle for seniors to roll over their proceeds from an LTC-Life Settlement into a “ Senior Heath Planning Accounts ’’ ( SHPA ) to pay for health and long-term care expenses .
Driving revenue continued on page 46
44 Perspectives Q4 2022