Life Settlement Regulation Update

Those "life settlements" are a greasy deal. First the agent goes out and sells the client some big life policy wrapped in a big bow with hopes and dreams of passing on a legacy and then the agent turns around years later when the client is running low on money and gets them to sell their life insurance policy on the cheap to investors who bet on peoples lives like they were betting horses at the race track. We all as agents are turned into whores by the practices of the insurance companies and the pressures of greed itself...........but there has to be a line you wont cross. How far is too far?
 
Those "life settlements" are a greasy deal. First the agent goes out and sells the client some big life policy wrapped in a big bow with hopes and dreams of passing on a legacy and then the agent turns around years later when the client is running low on money and gets them to sell their life insurance policy on the cheap to investors who bet on peoples lives like they were betting horses at the race track. We all as agents are turned into whores by the practices of the insurance companies and the pressures of greed itself...........but there has to be a line you wont cross. How far is too far?

I agree, Yoda. "Too far" is the idea of selling a policy with the hopes of coming back to convert it. I have a feeling that these will be the sleazebags that give a bad name to the industry.

"Just right" is helping the people that have NO CHOICE but to surrender their policies (or in some cases, just let them lapse), and either have the insurance company give them a few pennies, or worse still, nothing at all. Those are the people I choose to help. I'll never cross the line of selling a policy with the idea of converting it down the road. I think that is shady at best. We have a pretty strict guideline of people we will and won't help. I don't believe a person...in life....will EVER prosper "taking advantage" of others.
 
Those "life settlements" are a greasy deal. First the agent goes out and sells the client some big life policy wrapped in a big bow with hopes and dreams of passing on a legacy and then the agent turns around years later when the client is running low on money and gets them to sell their life insurance policy on the cheap to investors who bet on peoples lives like they were betting horses at the race track. We all as agents are turned into whores by the practices of the insurance companies and the pressures of greed itself...........but there has to be a line you wont cross. How far is too far?

A misconception is that funds look to buy policies on the sick and dying. It is actually the opposite. Funds want to buy policies on seniors that are healthy! It is much easier for us to predict cash flows when you buy 300 policies on 80 year old healthy seniors. With this strategy, you are able to look at the actuarial statistics and predict annual deaths. When you buy policies from seniors with a variaty of health issues, they could live 2 months of 20 years...who knows?
 
Lifesettlementadvisor,

New to this business and looking for any helpful information you can provide. I want to learn as much as possible about the settlement funding niche. Any chance we could chat about where to gain some knowledge?
 
Lifesettlementadvisor,

I'm looking into getting a life settlement broker license. I would like to get licensed in a state that has the greatest flexibility in transacting in as many other states as possible (FL, TX, etc.) i.e. reciprocity arrangements. Do you have any suggestions for which state that might be best to get licensed in?
 
2009 was a big year of Life Settlement Regulations.

Currently, 39 states regulate life settlements.

banning STOLI in the state and prohibiting policy owners from entering into a life settlement for 2 years after a policy is issued

Illinois: imposes disclosure requirements and licensing and ethics standards on viatical and life settlement providers

Minnesota: imposes restrictions on selling policies within 4 years after purchase. It also modified existing statutes regulating settlements.

Nevada:seek to eliminate STOLI, which limit the ability of policyholders to sell policies within 5 years after they have purchased the policies

New York: passed life settlement bill. The law establishes disclosure requirements, privacy protections and rescission rights.

North Dakota: seek to eliminate STOLI, which limit the ability of policyholders to sell policies within 5 years after they have purchased the policies.

Rhode Island: passed life settlement bill which will be effective 7/1/2010 and requires brokers to disclose compensation and other information to policy owners

Vermont: seek to eliminate STOLI, which both limit the ability of policyholders to sell policies within 5 years after they have purchased the policies.

Washington: requires that life insurers notify insureds age 60 and up who are seriously or terminally ill that they have alternatives to giving up or cashing in their policy. It also specifies that life insurance policy owners may not enter a settlement agreement within 2 years of receiving their policy and requires that policies settled within 5 years of issuance be reported to the state Office of the Insurance Commissioner.

West Virginia: seek to eliminate STOLI, which limit the ability of policyholders to sell policies within 5 years after they have purchased the policies.

Good Information, thanks for posting.


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Lifesettlementadvisor,

I'm looking into getting a life settlement broker license. I would like to get licensed in a state that has the greatest flexibility in transacting in as many other states as possible (FL, TX, etc.) i.e. reciprocity arrangements. Do you have any suggestions for which state that might be best to get licensed in?

You must have (for regulated states) a license in the state of the person that owns the policy.
Life Settlement licenses are not like insurance licenses -- you must apply for each one individually and there is no benefit of already having on in another state.
 

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