Life Settlements Death By 1000 Cuts!

Discussion in 'Life Settlements Forum' started by tlmarketing, Feb 8, 2013.

  1. tlmarketing
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    tlmarketing Well-Known Member

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    The tsunami effect of life expectancy increases is just beginning to take shape, leaving serious doubts about future viability of life settlement business for agents and life settlement brokers.

    A recent SEC filing by GWG is linked here. Unassociated Document

    A continued retraction of the marketplace is taking place, the cost of borrowing capital for banks is increasing, life expectancies increasing, premiums increasing on policies....a slow painful death....just my own observation
     
  2. lifesettlementadvisor
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    lifesettlementadvisor Well-Known Member

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    The adjustment made by 21st can be seen as a good thing for the market. The adjustment brings 21st much more inline with the other two main providers.
     
  3. tlmarketing
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    tlmarketing Well-Known Member

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    From an "new" investor standpoint, the LE increases by 21st may bring investor confidence....but the flip side is that fewer policies price, the market for term conversions & buy new coverage is gone, and offers are so low now, there is not much incentive to sell.
     
  4. lifesettlementadvisor
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    lifesettlementadvisor Well-Known Member

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    The purpose of life settlements are to provide the policy owner an option outside of surrending it - not to flip term conversions and buy new coverage.

    As long as lapse ratios stay high, there will always be policy owners that can benefit from a life settlement. As long as the net after tax offer to the policy owner is more than the surrender, its a great deal for them - especially if that number is 3-5 times the CSV
     
  5. tlmarketing
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    tlmarketing Well-Known Member

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    lapse ratios for older insureds in the age range that fits life settlements is not high at all - 4-5% of policies.
     
  6. tlmarketing
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    tlmarketing Well-Known Member

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    AVS which is one of the top 3 life expectancy firms in the country filed for bankruptcy yesterday.....largely due to the $148 million dollar lawsuit filed against it by Goshawk, which claims that AVS gave false and misleading life expectancy estimates..should be another interesting development for the life settlement industry.
     
  7. lifesettlementadvisor
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    lifesettlementadvisor Well-Known Member

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    The lawsuit was filed in 2005 and has been going on ever since.
    AVS filed Chapter 11 and is operating business as usual.
     
  8. tlmarketing
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    tlmarketing Well-Known Member

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    The lawsuit mentioned below is a new lawsuit filed in January of this year.

    As far as AVS operating "business as usual", that's not really the case given that the founder of AVS Phil Loy is currently suing Longevity Partners, which is the firm that bought AVS.
     
  9. lifesettlementadvisor
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    lifesettlementadvisor Well-Known Member

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    Here is a link to the press release that explains the whole situation.

    AVS Press Release
     
  10. tlmarketing
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    tlmarketing Well-Known Member

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    I guess there are always 2 sides to every story.
     

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