Heavy Guy wants large face Whole Life . . .

[Lloyds of Lubbock]

If the term is highly rated and the premium to convert on permanent prohibitive, he may want to convert it and do a partial life settlement.
This will give him money to pay premium.
This may work, or not.....just an idea.

 

[scagnt83]

If the term is highly rated and the premium to convert on permanent prohibitive, he may want to convert it and do a partial life settlement.
This will give him money to pay premium.
This may work, or not.....just an idea.

Damn. That is one hell of an idea.

 

[DHK]

If the term is highly rated and the premium to convert on permanent prohibitive, he may want to convert it and do a partial life settlement.
This will give him money to pay premium.
This may work, or not.....just an idea.

How can you get an offer for life insurance (be insurable at the very least) and then turn around to sell it?

Viatical settlements are for people with existing policies with (generally) less than 10 years of life expectancy.

I doubt anyone who has a life expectancy of less than 10 years will get an offer for coverage.

 

[myinsurebiz]

If the term is highly rated and the premium to convert on permanent prohibitive, he may want to convert it and do a partial life settlement.
This will give him money to pay premium.
This may work, or not.....just an idea.

This concept is way out of my league . . .

Thanks for the suggestion.

 

[Lloyds of Lubbock]

How can you get an offer for life insurance (be insurable at the very least) and then turn around to sell it? You put the policy in force and then put it on the market. There are numerous Life settlement companies. Why do you think you cant do this?
You would have to check your state regs.
Some states require a 2 year wait. Some 5 year.
I am not sure how a term conversion fits into this waiting period.
I have only done one of these, so I am no expert.
My post is just an idea.
Viatical settlements are for people with existing policies with (generally) less than 10 years of life expectancy. A viatical settlement is not a life settlement.
A viatical settlement generally has a 2year life expectancy.
I doubt anyone who has a life expectancy of less than 10 years will get an offer for coverage.
If a policy is issued at a table 10, the insured does not have a ten year life expectancy and the policy is priced accordingly
The original policy is term, nothing is preventing the insured (and owner) with the agents help of attempting to do a life settlement on that policy.
It does not hurt to call a settlement company like Coventry (not an endorsement) for some information.
Maybe you have a case, if not you will get an education.
You never know, you may come across a real case in the future.

Did you ever find out the underwriting status of the original term policy and if it is convertible term?

 

[Tahoe Ray]

How can you get an offer for life insurance (be insurable at the very least) and then turn around to sell it?

This description is basically what was once the STOLI market.

That's not the case here since the insured actually wants/needs the coverage and has an existing policy which I believe is what Lloyds was suggesting he use.

If the existing term has conversion privileges, he could sell part of it (and let the buyer convert it) and use those funds to convert his remaining DB.

It's really a cool idea.

 

[Lloyds of Lubbock]

Thanks!

 

[DHK]

How can you get an offer for life insurance (be insurable at the very least) and then turn around to sell it? You put the policy in force and then put it on the market. There are numerous Life settlement companies. Why do you think you cant do this?
You would have to check your state regs.
Some states require a 2 year wait. Some 5 year.
I am not sure how a term conversion fits into this waiting period.
I have only done one of these, so I am no expert.
My post is just an idea.
Viatical settlements are for people with existing policies with (generally) less than 10 years of life expectancy. A viatical settlement is not a life settlement.
A viatical settlement generally has a 2year life expectancy.
I doubt anyone who has a life expectancy of less than 10 years will get an offer for coverage.
If a policy is issued at a table 10, the insured does not have a ten year life expectancy and the policy is priced accordingly
The original policy is term, nothing is preventing the insured (and owner) with the agents help of attempting to do a life settlement on that policy.
It does not hurt to call a settlement company like Coventry (not an endorsement) for some information.
Maybe you have a case, if not you will get an education.
You never know, you may come across a real case in the future.

Did you ever find out the underwriting status of the original term policy and if it is convertible term?

Fair enough. I've never done even one.

For the life settlement calculators I've seen, they won't give any kind of quote unless there's a less than 10 year life expectancy. These companies do want to collect at some point.

For a policy to be issued, the company should be making quality underwriting decisions that the insured would outlast the validation period and the policy can be profitable for the company.

My only other concern is that some agents may tie this concept into the idea of "free life insurance" or "make money by flipping life insurance policies" just like flipping houses. Flipping houses is perfectly fine. Flipping life insurance policies... I don't see how that's good for the insurance companies or the investing companies buying the policies. I could foresee the tax consequences of the difference between premiums paid and any gains to be taxable at least at a capital gains rate. If it was done in the same year, I'd guess it would be taxed as ordinary income just like flipping a house.

I have not looked into any of that, but just my thoughts.

 

[Allen Trent]

Fair enough. I've never done even one.

For the life settlement calculators I've seen, they won't give any kind of quote unless there's a less than 10 year life expectancy. These companies do want to collect at some point.

For a policy to be issued, the company should be making quality underwriting decisions that the insured would outlast the validation period and the policy can be profitable for the company.

My only other concern is that some agents may tie this concept into the idea of "free life insurance" or "make money by flipping life insurance policies" just like flipping houses. Flipping houses is perfectly fine. Flipping life insurance policies... I don't see how that's good for the insurance companies or the investing companies buying the policies. I could foresee the tax consequences of the difference between premiums paid and any gains to be taxable at least at a capital gains rate. If it was done in the same year, I'd guess it would be taxed as ordinary income just like flipping a house.

I have not looked into any of that, but just my thoughts.

I think this idea in the thread is based solely on if the existing term is convertible, but consumer cant afford the entire premium to convert. Every carrier is different on what they allow to be converted to (WL/UL/IUL-no lapse UL/IUL) & some only allow conversions to products they dont actually sell to the public ( higher cost & worse performance than those sold to insurable people today).

 

[Tahoe Ray]

For the life settlement calculators I've seen, they won't give any kind of quote unless there's a less than 10 year life expectancy

How does a calculator like that even work?

The handful of these that I've done all involve underwriting and conversion quotes before any offer is presented.

They're bid on by different entities too.

Funniest part is if you want to get a good bill of health, just try to get a settlement. It's like reverse underwriting. Buying a policy, they tell you all of the reasons that you're going to die before you should and make you pay more. With settlements (again, just my limited experience) they tell you all of the reasons you're going to live a lot longer than what the doctor says and offer you less lol.