The Life Insurance Settlement-New Rules, New Game
By: Life Insurance For Seniors | Posted: 13th July 2005
Whenever you change the rules of a known game or create a new game altogether there needs to be mutual buy-in and agreement to the rules by all involved parties and protecting consumer interest and the fairness of the game all interplay on and off the field. When it comes to the world and market of the Life Insurance Settlement, this in no longer a game!
There are active involvement and activity from key stakeholders in the secondary market for life insurance settlement where protecting consumer interest, rights and value in the marketplace by empowering and zealously protecting specifically: (i) the right to be informed about the opportunities presented by the market, (ii) the right to access the market and (iii) the right to privacy throughout the transaction (iv) it is not without fiduciary responsibility.
Some effects on the financial markets have been defined by key players in the arena of life settlements,life insurance settlements or the world of the secondary life insurance market:
� The market's growth is actively drawing the attention of capital markets.
� High-quality institutional funding from leading investment firms is pouring into the secondary market.
� As the market expands, institutional backing provides the foundation of a secure funding source.
� It also carries stringent requirements for security and confidentiality that offer unmatched protections for consumers � an added bonus.
In effect, by opening access to the fair market value of life insurance instruments and policies, consumers' perspectives, approach, valuations and actions have changed forever. This newly-rediscovered Life Insurance Settlement gives them new possibility and other financial options, in turn more empowerment to better plan for their future. It is also a win-win for financial advisors who are now armed with new strategies to better serve the interest and needs of their customers. Also new responsibilities for all parties involved, transforming forever the traditional life insurance asset into a potentially untapped resource and dynamic asset with lots of potential. The natural result is more flexibility, empowerment, choice, and an increased value proposition.
Current non-forfeiture laws provide for: 1) surrendering the life insurance policy for cash or 2) exchanging it for a paid-up policy with a reduced face amount. Because both of these options are based on cash surrender value, they frequently undervalue the policy-owner's asset. As a result, there is a compelling need for paid-up benefits based not on cash value, but on market value. Within the secondary life insurance market clients' policies are in fact appraised on the secondary market. In return they can learn what the policy is worth in cash and as a paid-up policy. Empowered with this information, financial advisors can now assist clients in utilizing their capital more efficiently. A new free market is born, and a Life Insurance Settlement is your way to capitalize.
About the Author
Jon Thomas has been involved in finance and insurance, specializing in emerging growth markets since 1979. He continues to write articles to help seniors obtain life insurance at little or no cost.
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Tags: life insurance coverage, life insurance policy, life settlements, health condition, company states, sound investment, variable life, insurance policies