Life Settlement Blog

Life Settlement Seller Expectations vs. Market Realities

In my last post, I talked about some of the factors currently weighing on the life settlement industry. A smaller pool of buyers, increased regulation and longer life expectancies just to name a few. However, with this post we will explore the real world implications of an industry with less buyer activity and conversely how the consumer’s expectations are factoring into the equation.

Current Factors Weighing on Life Settlement Offers

After a bleak 2009 in the financial services industry many are looking to the dawn of 2010 filled with renewed optimism. This certainly holds true for the life settlement industry as well. While we’ve seen a number of indicators that buying activity is poised to strengthen in the life settlement industry this year, it looks to be a measured and incremental return of activity rather than an exuberant return.

Current State of the Life Settlement Market.

This life settlement blog posting is a copy of our posting which recently appeared on Technorati. Just in case, any of you missed the popular technorati article, we are making it available here through our blog since it has valuable insight into today's life settlement market.

What about the big policies?

Life settlement broker commissions are often a hot topic in the life settlement industry. A common question that comes up is “doesn’t it take the same amount of work to sell a large policy as it does a small policy?” Which inevitably leads to the question, “well then shouldn’t the broker’s commissions be reduced for the larger policies?” First, a shameless plug for Amrita Financial - All of our commissions are essentially reduced with our direct to consumer model since we refund half of the commission amount to policy sellers. That not withstanding, lets apply the question to traditional bricks and mortar, life settlement brokers.

Life Settlement Broker - Behind the Scenes Unpleasantries.

A life settlement broker to a lot of people doesn't seem to add much value to the life settlement process. They collect and organize documentation to support the sale of a life insurance policy, then present this information to life settlement providers for consideration and hopefully an offer. In addition, a life settlement broker outlays money to acquire the necessary documentation and pays for the overhead of having someone manage this process.

Life Settlement Provider Buying Appetite Trends

How much is my policy worth as a life settlement? That has to be the number one question we are asked. As with anything in a free market economy, something's value is only determined when a willing buyer and a willing seller agree.

Life Settlement Providers - How do they fit in?

For those outside of the life settlement industry the process of selling a life insurance policy would presumably be very straightforward. It conceivably starts with a senior that has an unwanted policy they would rather sell than let lapse or trade for the minimal cash surrender value. The senior enlists a life settlement broker who in turns brokers the best deal from a buyer, known as a life settlement provider. Ahhhhh if it were only that easy.

Life Settlement Scare Tactics

Recent life settlement cases have been a telling snapshot of the sometimes conflicting dynamics within the life settlement industry. It is no secret that life insurers often have a guarded view of the life settlement industry or anyone that is attempting to sell their existing life insurance policy. Life insurance companies would obviously rather have a policy owner let their policy lapse than have it stay in force and result in the death benefit payment.

Life Settlement Bubble?

Life settlements got interesting coverage in the two recent articles from well known media sources. The first was a NY Times article about life settlement securitization, entitled "Wall Street Pursues Profit in Bundles of Life Insurance". The second was in the Business Insider in an article entitled "10 Economic Bubbles in the Making".

Life Settlement Brokers Feel Threatened in article

Life settlement brokers sent out the first salvo at Amrita Financial on July 22, 2009. On that day, published an article entitled "Ways You're Getting Ripped Off". This article featured many different industries and rip offs, but at the top of the list was life settlements. didn't question the need for a life settlement or their legitimacy in the marketplace, rather the reporters focused on the opaque nature of life settlement transactions and unusual compensation structure for life settlement brokers.