(3 Minute Read)
There’s still a stigma that some professionals associate with the life settlement market, albeit one that is shrinking every day. Recently, though, a new fiction novel called The Carnage Account uses life settlements as motive for murder. Articles have latched onto the novel to showcase it as a negative aspect of the life settlement market, but there are a few key things to keep in mind.
- It’s a regulated industry
The life settlement market is one of the most highly regulated industries. Any potentially negative aspects of the life settlement market as presented in the novel are purely fiction. The personal information of the insured is not revealed to the institutional buyer, and the insured and buyer have no reason to ever meet in person.
- Tony Soprano isn’t buying your policy
Some articles try to equate those who invest in the life settlement market with mobsters, which simply isn’t true. The majority of investors buying life settlements are simply that: investors. They treat life settlements the way they treat any other line in their portfolio: as an investment.
- Life settlements make sense
The simple fact of the matter is that often, a life settlement is a sensible decision for the insured. If the life insurance policy is about to lapse and there’s little to no cash surrender value, the insured can receive money for that policy. For those needing assistance paying for nursing homes, or simply looking to put their money into more lucrative investment opportunities, it’s a sensible decision.
- It’s not a matter of betting against life
Investors aren’t sitting around waiting for a policy to mature. Life settlements are often part of a much larger portfolio, and no investor is relying 100% on life settlements. For most, it’s a means of diversifying a portfolio. The investor may have dozens of life settlements as part of their portfolio, and know next to nothing about the insured aside from a life expectancy.
While the life settlement market exists, it doesn’t make sense to let a policy lapse or to surrender it for practically nothing. If you or one of your clients has a policy they no longer need, a life settlement may be an option to get greater value from your policy. Complete our qualification calculator to see if it’s an option for you.