Life Settlement Political Action Committee Opens 2009 Campaign Drive in NYC

ORLANDO, FL–(Marketwire – November 4, 2009) – On November 8-10 in New York City, the Life Insurance Settlement Association’s (LISA) non-partisan federal political action committee, LISAPAC, will launch its 2010 campaign drive to preserve and protect the life settlement industry. As 2009 winds down, LISAPAC is aggressively gearing up for a new political year with tremendous possibilities as well as potential threats. In a matter of days, at the LISA 15th Annual Fall Life Settlement Conference, the PAC will remind life settlement professionals about its critical mission.

"On a federal level, 2009 will prove to be decisive year in the future of life settlements," remarked Mark Goode, LISAPAC Chairman. "In the midst of substantial and unprecedented federal interest in this market and the emergence of Wall Street participation in life settlements, the work of the PAC has never been more urgent and its important service to our market is clear." LISAPAC’s presence at the LISA 15th Annual Life Settlement Fall Conference comes in the wake of multiple significant developments coming out of Washington, D.C. In September, Congressman Paul E. Kanjorski (D – PA), Chairman of the U.S. House Sub-Committee on Capital Markets, Insurance, and Government Sponsored Enterprises, convened a hearing on life settlement securitization. In August, U.S. Securities and Exchange Commission (SEC) Chairman Mary L. Schapiro launched a special internal taskforce to review the subject of securitization in the settlement industry. The U.S. Governmental Accountability Office (U.S. GAO) is seeking a better understanding of life settlements as they develop a forthcoming report on the secondary market. Most recently, the North American Securities Administrators Association (NASAA) announced the formation of a task force to consider the issue of life settlement investment.

"The considerable action in Washington on this issue should serve as a wake-up call to all who seek to preserve the settlement option for consumers. Ours is a vital service to seniors that, despite exponential success in recent years, demands significant explaining to Washington legislators," explained Doug Head, LISAPAC Treasurer and LISA Executive Director. "Our job is to ensure that policy makers get it. They are facing some critical questions with regards to federal treatment of settlements in the scope of larger insurance legislation. Consumer property rights must be preserved in a time of expanded regulation."

During its inaugural fundraising campaign LISAPAC raised nearly $100,000 from more than 70 industry leaders. LISAPAC’s presence at LISA’s 15th Annual Fall Conference will serves as a major indication that it is driving for a substantial increase in participation by the life settlement community. "The stakes are simply too high and we must work together to achieve 100% industry participation for LISAPAC," commented Mark Goode. "One cannot overstate the gravity of the challenges we face on not only the legislative front but also from a public relations perspective. By now, it must be clear to all that media outlets drive the public discourse and, by extension, the debate among policy makers. LISAPAC serves a vital role in clarifying and, where necessary, correcting the direction of this discourse. In this regard, LISAPAC is an important force for good in promoting public policy that protects the interest of senior insured consumers, as well as protecting our marketplace."

To learn more about LISAPAC, please call the LISA office at 407-894-3797 and ask for the LISAPAC Administrator.

10TH ANNIVERSARY OF LIFE SETTLEMENT INDUSTRY

LISAPAC’s campaign comes at another significant moment in life settlement history — 2009 marks the 10th anniversary of the industry. At the 1999 September meeting of the National Association of Insurance Commissioners (NAIC) convened in Orlando, Florida, representatives from a settlement firm announced that they were actively purchasing policies from seniors who were not terminally ill. This was the first public acknowledgment of such transactions. Having evolved out of the viatical settlement industry, life settlements represented a quantum leap in the ability of an insurance policy owner to extract, while living, hitherto unrealized cash value. Since then, thousands have benefited from this unique financial opportunity.

About LISAPAC

LISAPAC, a qualified multi-candidate committee is the federal bipartisan political action committee of the Life Insurance Settlement Association. The purpose of LISAPAC is to use raised funds in support of United States Senate and House of Representatives candidates who endeavor to promote consumer rights which will lead toward a strong and competitive market for the life settlement industry by advancing the legislative and regulatory interests of the members of LISA. Any U.S. citizen or green card holder can contribute to LISAPAC. Contributions must be voluntary. Contributions are not tax deductible for federal income tax purposes. LISAPAC cannot and does not accept corporate contributions. LISAPAC is administered by its Board LISA’s Political Committee. LISAPAC’s Political Committee is comprised of LISA’s President, the Chairman of the Political / Legislative Committee and the LISA Executive Director. LISAPAC is fully compliant with all FEC and IRS Rules and Regulations.

About LISA

Established in 1994, the Life Insurance Settlement Association is the oldest and largest trade organization in the industry. Its goal is to promote the development, integrity, and reputation of the life settlement industry, and to promote a competitive market for the people it serves. LISA now represents over 140 members with a wide variety of interests in the industry. For more about the association, visit www.thevoiceoftheindustry.com <http://www.thevoiceoftheindustry.com> .

Do Older People Need Life Insurance Policies?

Have you outgrown your need for a life insurance policy after your old term life policy expired? Did you have group life at work, but that ended because you retired or changed jobs?

Many of us purchased term when we were younger. Or we signed up for a group life insurance plan at work. We were worried about covering our home mortgages, kid’s education, etc. in case we passed away. And yes, younger people may need good coverage. But does that mean older people do not need coverage?

Now we find ourselves in our fifties, sixties, and seventies, and we lack coverage. A group policy may have ended when we retired or changed jobs. A term contract may have ended. Or maybe we just let our policy lapse when we thought we did not need it any more. Either way, at a time when we are more likely to plan for the future, we lack a life insurance policy!

So in middle age or retirement years, we find that we may still have obligations. Many of us are still working at jobs, running a business, or responsible for other people.

The kids did not always grow up and get on their own like we thought they would. Nowadays, many grown children are returning to live with parents, and sometimes they bring their own kids! You may actually have more people who depend upon you than you did before.

The house loan may not have gotten paid off. Some people move, and others have to take out a second loan or delay payments because of financial reasons.I am certain that your situation is not the same as you thought it would be when you were 35 years old. Who will make that payment without us?

And sometimes we take on added duties as we age. Many people start a small business in middle age or even older. If the business loses us, what will happen to it? Key man or business owners policies can keep it running. Business policies can also be used to guarantee financing and settle estates.

And these policies are available. Since people are living longer and healthier lives, major insurers are willing to issue coverage. It may be tough to find a 30 year term policy at age 70, but many people can qualify for 10 year term. And whole life policies get issued to seventy year olds, and sometimes, even up to age 85!

What type of life insurance should older people consider?

You need to consider your own situation. This would include your financial goals, what you need to protect, and your general health status. The cheapest term policies may require an applicant to be in reasonably good health for their age. Some whole life policies will ask few, or no, health questions though.

Whole life policies will cost more per dollar of coverage, but they can also be considered assets with possible cash or life settlement values. Term life usually costs less, but of course, it will expire, and cannot usually be considered any sort of an asset.

What happens after the life settlement transaction?

A life settlement is better than cash surrender or lapse as it pays you a lump sum amount which is actually lower than the value of your life insurance policy. However, it helps to gain more from your dead life insurance policy as it increases the liquidity and the value of a life insurance policy. If your life insurance policy is no longer required or you can not afford to pay the premiums of the policy any more than you can enter into a life settlement deal. The life settlement policy is beneficial for an individual with declining health and age above seventy as these policies have high rate of return.

Who owns the Policy?

After entering into the contact of the life settlement policy the owner of the policy is changed from the policy holder to the investor purchasing the policy. All the rights and obligations of the policy are transferred to the new owner of the policy and the owner will receive the complete death benefits of the life insurance policy after the death of the policy holder. You will receive the money after completion of the life settlement process. The value of the life insurance policy depends upon the number of factors including the age of the person, medical condition, type of the insurance policy being sold, the rating and the repute of the insurance company owing the insurance policy. The person can sell almost all kinds of life insurance policies like Universal life, whole life, Term Life, Variable life and many others.

After you have sold the insurance policy to the investor there is no restriction on you at the use of money you received from the investor. You can use this money in any respect according to your own will.

The policy holder will receive a cash sum of grater than the cash surrender value of the policy from the life settlement provider. The provider pays the remaining premiums and holds the policy as the confidential asset portfolio. Usually the life settlement providers are licensed in the respective state of the policy holder.

Does a level of cover need to be re-established

A life settlement is an alternative process for senior citizens to cover up their immediate needs. As the amount received after a life settlement is not a loan so it is unrestricted and requires no re-establishment or repayments.

Plan Every Old Age Requirement With Bonded Life Settlement

Insurance service provider companies always strive to find out new ways to settle down financial worries of people. In order to facilitate seniors a less burdensome old age, these insurance companies are offering variety of life settlement policies with great financial freedom. These policies have become very popular among seniors, who believe in planning every step to make the entire walk pleasant. They are moving towards life insurance service providers to meet their old age financial requirements. As a result of the earnest efforts of insurance service providers, seniors have managed to get an excellent opportunity to double their insurance benefits with bonded life settlement. This policy provides them a great way to fulfill their old-age financial requirements. It is a transferable policy and anytime the policy holder can sell it to someone who is interested in buying the existing policy. Bonded life settlement policy allows a policy holder to re-examine every aspect of policy so that he may easily make a decision whether the policy is affordable or not. In any case, if the policy holder finds premium amount very expensive then anytime he can sell the policy to interested party. Bonded life settlement is advantageous for both parties as it provides them an excellent source of easy income. This entire process of ownership transfer goes on under supervision of insurance company. Hence, if you are bothered about authenticity and true cost evaluation then throw your worries aside because you will get true value of your policy. Moreover, you can also sell only a considerable portion of your policy so that you may keep a source of income for your financial emergency too.

The money that a bonded life settlement policyholder gets through sale of his or her policy can be used for any purpose, as there is no restriction regarding usage of insurance money. For you the process of selling a boded life insurance policy will be very simple as insurance company will be responsible to arrange every required term. The concerned insurance company fully supports the entire process and monitors every transaction till accomplishment of deal. By the time an investor becomes the owner of the policy, amount of interest on existing policy will be paid to the investor as he or she will be the latest owner of the policy. Moreover, the investor will be liable to pay remaining premiums after transfer of ownership.

As it is an official process, some terms and conditions are also incorporated with it, such as for selling a portion of policy, the expected life of the policy holder should be 36 month. It enables the policy holder to sell a considerable portion only and helps him or her in getting maximum value of the policy. Bonded life settlement is a smarter and instant way to arrange money to fulfill instant financial requirements. It has come as a rational source of money to all those seniors who believe in long-term financial planning to secure every aspect of life. Seniors, who are worried about settlement of their post retirement financial requirements, can get a sturdy source of income with bonded life settlement policy.

Despite bad ¹08, life settlements appear ready for return, analyst says

The life settlement industry, still reeling from its loss of funding sources in 2008 that caused a 4% decline in transactions, may be poised for a strong return, an industry analyst predicts.

“The buyers’ market of late 2008 and 2009 should help buyers re-establish profitability in their portfolios,” said Stephan Christiansen, director of research at Conning Research & Consulting, in a statement. “More policyholders want to sell, and more agents now understand life settlements — the near term challenge is all about buyers’ and investors’ capacity.”

He added that the life settlement market “must shake off profitability concerns and general market concerns about life insurer solvency before it will return to growth.”

The volume of transactions in the life settlement market declined by about 4% in 2008. Transactions fell to an estimated $11.7 billion in face value, a reduction from the $12.2 billion the year before, a Conning Research and Consulting study reported.

Without sources for funding available in a good economy two and three years ago, many life settlement companies were unable to purchase life insurance policies over the last year. Further eroding the market as the decision of several major life expectancy underwriters to revise their methodologies, raising life expectances, which in turn called into question the accuracy and valuation of existing life settlement portfolios, said Scott Hawkins, analyst for Conning.

The lack of funding sources came just when the economy led people seeking quick cash to recoup from stock market losses to consider life settlements, according to other industry experts.

“The economic crisis was the major impediment to growth in the United States life settlements market in 2008, as the credit markets froze in the second half and life settlements buyers had difficulty financing new premiums,” Hawkins said.

Making Money With Life Settlement

Have you recently heard of a simple way to invest and be sure that you are going to make money? If so, you have probably heard of life settlements. Unlike the stock market this is a type of investment that is sure to be fruitful because it has to deal with death, and death is something that is unavoidable for us all. Buying a life settlement is something that has been done since the 1980’s and it is a billion dollar business that is growing by leaps and bounds with each passing year. This is a process that can be attractive not only for the investor, but also the owner of the policy.

The way that this works is simple: people who are terminally ill can choose to sell their life insurance settlements. Selling is perhaps too broad of a term, instead they are finding people who want to invest in their life insurance policy. For instance, if someone who is terminally ill has a one million dollar life insurance policy they can find an investor who is willing to give them $200,000 or $300,000 for their policy. The investor will give the terminally ill individual the $200,000 or $300,000 and then they will be made the beneficiary of the policy.

While this sounds like a big investment to make, it pays for itself. Usually the people who are willing to sell their policies will only live for a matter of months. So, the person who invests gives them the money and then when the ill person passes on the investor will receive the proceeds from the life insurance policy! This is a fast and easy way to make money as in investor and even though they have to put up money to make money, the turn around is quick and in the end they end up making $800,000! You can’t argue with making this sort of money over the course of a few months.

Senior settlements are the most typical type that investors will consider. The reason for this is that they are usually much more short term and more reliable on a whole. The only thing that needs to be done is that the senior needs to submit to a medical check up, sign papers acknowledging that they know what they are doing, and then sign the investor on as the beneficiary of their policy. The whole process can be taken care of in a matter of a couple of days and this is why this is seen as a really great way to make money as an investor and also a great way to get the money that you need to get you through until the end of your life.

The Life Settlement Business Struggles to Survive

The business of betting on death is fighting for its life on Wall Street.

Once considered a promising diversification play and the possible makings of a bubble, trading in so-called life settlements is still scarce and getting scarcer. The Life Insurance Settlement Association said that half of such commerce has disappeared in the past year, roughly $8 billion in transactions.

While many elderly policyholders are still game to sell their insurance claims and there are an estimated $10 trillion in individual policies in the United States up for grabs, investor interest has all but vanished in recent months, as credit dried up and securitization activity flat-lined.

Banks have also grown skittish about the business as the Securities Exchange Commission <http://www.fins.com/Finance/Companies/2048/U-S-Securities-and-Exchange-Commission>  and theFinancial Industry Regulatory Authority <http://www.fins.com/Finance/Companies/573/Financial-Industry-Regulatory-Authority-Inc>  both pledged in recent months to take a hard look at such investing.

Economically, the practice makes a great deal of sense. Here’s how it works: a company buys a life insurance policy, accepting the ultimate payout in exchange for a lump sum of cash and a commitment to keep covering premiums. The company then sells the policy to a brokerage, which in turn offers the policy as an investment, typically to institutional clients like pension funds. The sooner the insured person dies, the more money the policyholder makes.

"Insurance is a good value for people to hang onto, but if they can’t or don’t want to or if their wife of 30 years dies and they have a new girlfriend and want to go on a cruise, then it makes some sense," said Doug Head, executive director of the life settlement association.

Like with subprime mortgages, most investors buy bundles of the holdings, assembling a diverse batch of policies by picking coverage of different sizes and of individuals with different afflictions and health risks. A cure for cancer, for example, would be disastrous to a fund holding policies solely on cancer patients, so life investors hedge with a macabre series of selections.

Proponents say that the business makes for a more liquid insurance market and provides cash infusions to people who may no longer want or need a death payout to beneficiaries.

Investors, in turn, get a payoff entirely unswayed by the economy or capital markets.

"People who were sitting on these investments during the crisis were real happy, because they didn’t go through the precipitous decline," Head said. "And they didn’t lose their hair in the process."

Michael Wong, an investment bank analyst at Chicago-based Morningstar Inc., said that life settlements offer "a statistically known payout and a market large enough for it to matter to investment banks."

Indeed, as Wall Street became interested, the life settlements business grew from a $2 billon industry in 2001 to $16 billion in 2008. An estimated 3,000 finance pros currently work in this business.

Goldman Sachs <http://www.fins.com/Finance/Companies/203/Goldman-Sachs-Group-Inc>  started buying life insurance policies in 2006 and eventually bought a minority stake in a company that specialized in such transactions. In December 2007, it launched a longevity index calledQxX <http://www.qxx-index.com/> , intended to help life insurance investors measure the risk of covered individuals living longer than expected.

Credit Suisse <http://www.fins.com/Finance/Companies/3077/Credit-Suisse-Group> , which also entered the market in 2006, has 90 workers in New York and London dedicated to life insurance investing. It buys policies directly and sells them to insurance companies, fund managers and pension funds. On average, Credit Suisse pays the insured 10 times more than they might get from an insurance provider to surrender their policies, according to Kurt Gearhart, head of regulatory and execution risk in the firm’s Life Finance Group.

However, capital has been scarce in recent months and the increased volume of life insurance settlements drew the attention of regulators.

In July, FINRA issued a warning to firms dealing in life settlements, noting that such transactions are subject to federal securities laws and FINRA rules. It pledged to keep a close eye on the transactions and threatened to reign in huge sales commissions.

In mid-September, SEC Chief Mary Schapiro called for a special task force to investigate the business and look for "regulatory gaps." "As unsettling as this might sound, life settlements are a growing market," Schapiro said. "And, there is a belief that this potentially could become the next big securitized product offered by Wall Street. …The fact is we need to be out in front on this issue."

Schapiro said that the practice requires seniors to share sensitive private health information and may expose the elderly and seriously ill to abusive or fraudulent sales tactics.

The regulatory pressure appears to have spooked Wall Street. A number of big finance firms, including Credit Suisse, Goldman Sachs and JPMorgan Chase <http://www.fins.com/Finance/Companies/122/JPMorgan-Chase-Co> , declined to answer questions for this article.

Meanwhile, the Life Insurance Settlement Association has lost 15% of its members in 2009, about 25 companies with five or six employees each, on average, that either went out of business or didn’t have enough cash around to pay dues.

In a House of Representatives hearing in late September, Goldman Sachs Managing Director Steven Strongin said that life settlements don’t pose systemic risk to the economy but have "real potential for abuse of consumers."

Russel Dorsett, president of the association said that the number of public life insurance securitizations "can be counted on one hand — with several fingers left over."

Head, executive director of the association, said that interest from big finance firms will slowly recover, but efficient public securitization of life insurance policies is likely still years away.

"I think we’ll get there, but it will take awhile," he said. "We’re still feeling our way."

Buttressing Head’s hopes, about 100 people from Wall Street firms have registered for the association’s annual investor conference in Manhattan Nov. 8; that’s twice as many as last year.

Meanwhile, life settlement proponents continue to fight comparisons to the subprime mortgage business. The association predicts that life settlements will never be as widespread as mortgage securitization because many people buy coverage with the intent to keep it.

And death, for better or worse, is easier to forecast than home prices.

3 Tips On Planning Your Life Settlement

A life settlement is a way that many people use to raise funds from their life insurance policy. The idea behind a life settlement is that they sell their policy for an amount that is greater than the cash value. Then, they transfer the beneficiary status to the person who bought the policy. Once the benefits have been transferred, the policy is paid to the buyer upon the death of the seller. It is a very complicated financial transaction that can be beneficial to the buyer and the seller. The seller gets to enjoy the money while they are still alive and the buyer gets to realize a huge return on their investment. If you are considering a life settlement, there are a few things that you should take into consideration.

1. Hire a Professional

With such a growing market of life settlements, there are a large number of professionals that you can turn to. Handling a life settlement transaction can be tricky if you do not know what you’re doing. There are a lot of legal ramifications involved and you have to be sure of everything before you make any decision. Accountants, attorneys, financial planners, wealth managers, insurance advisors and estate planners are just a few of the people that could oversee this financial transaction. You want to make sure that all of your bases are covered before doing a deal like this. Most people only do this once in their lifetime, so it is not something that they keep up to date on. A trained financial professional can guide you through the process from beginning to end. They can help you avoid some of the mistakes that many people make in the process.

2. Get Fair Value

When shopping your life insurance policy around, you’ll want to make sure that you get fair value for your policy. For example, let’s say that you had a $1,000,000 life insurance policy. Someone offers to buy the policy for $50,000. In most people’s opinion, this would not be a fair trade. They are going to get $1,000,000 when you die; however, you have to live off of the $50,000. There is no set rule as to what is fair and what isn’t. Just make sure that you feel comfortable with the transaction before agreeing on a price. If the person you are working with does not want to give you fair value, move on to someone else. There is someone out there who will.

3. Have an LER Done

An LER is a critical component of a life settlement. An LER is a Life Expectancy Report which tells investors how long you may live. It is not a specific report for you, but it groups you together with other people in your same class. They will take factors into account such as your age, gender, race, smoking habits and more to determine a range that you could live to. The shorter the range, the more your life insurance policy is worth.

Top 10 Myths Of Life Settlements

1. The client must be terminally ill. A life settlement differs from a viatical settlement in that the original policy holder may have a life expectancy longer than two years.
2. It’s a security. In a life settlement, the whole policy is sold at once, without “raising capital or fractionalizing policies into shares for sale as an investment to individual investors.”
3. The client must be desperate for cash. The typical life settlement client is a 76-year old high-net-worth person with an underperforming policy.
4. The industry is not regulated. Brokers must be licensed in 33 states; in the remaining states, the insurance commission monitors these transactions regularly. “The industry’s governing body — the Viatical and Life Settlement Association of America (VLSAA) — works closely with the National Association of Insurance Commissioners (NAIC). The NAIC has written a model act to encourage states to adopt uniform standards for regulating the life-settlement industry.” However, California currently does not regulate life-settlement transactions.
5. Life insurance should never be sold. “The reality is that if you have ever had a policy surrender or lapse you are already very active in the liquidation of life insurance policies,”. If a policy is surrendered it is sold back to the carrier at a predetermined price. If it lapses, it is sold at a zero price. “A life settlement simply allows for the fair market value of the policy to be recovered.”
6. The whole process is cumbersome and inconvenient. All underwriting utilizes existing medical records, and the process normally takes six weeks to eight weeks to secure offers.
7. Any senior with insurance will qualify. The life expectancy of the insured, premium amounts, surrender amounts, and loan amounts are all considered when determining if a life settlement is appropriate.
8. The return is not worth the effort. While average returns vary, returns can be anywhere from 12 percent to 33 percent of the policy’s face value.
9. It’s twisting or churning and it’s illegal. Twisting and churning involve the use of misleading practices to induce a client to lapse, surrender, or terminate a financial product to effect a replacement for the purpose of generating a commission. On the other hand, “life settlement candidates are identified through routine periodic insurance reviews or surrender or lapse notices, an automatic premium loan, or a past due premium notice; the life-settlement option is no more inappropriate than recommending a surrender, lapse, or 1035 exchange as an exit strategy for any life policy already in jeopardy.”
10. The liability is too great. Every financial professional should be mindful of the spirit of the NASD suitability rule (Conduct Rule 2310) in his or her approach to life settlement transactions, even though the sale of a life insurance policy is not a securities transaction. The suitability rule provides that a member shall have reasonable grounds for believing that the recommended transaction is suitable for the customer based on the client’s entire financial and personal profile.

Insurer Reports Life Settlement Loss

AXIS Capital Holdings says it expects its third quarter operating results will suffer after an increase of about $136 million in the fair value liability of an indemnity derivative contract that is exposed to life insurance settlements.

  AXIS, Pembroke, Bermuda, attributes the loss to “unfavorable longevity experience in the life settlements portfolio underlying this contract.”

  In addition, AXIS, a specialty insurer and reinsurer, expects to lose around $260 million in other-than-temporary-impairment losses in a fixed maturity investment portfolio of medium-term notes.

  Despite the losses, Standard & Poor’s Ratings Services said there would be no impact on its ratings for AXIS.

  “We consider AXIS’s losses in the indemnity derivative contract modest relative to the group’s capital base,” S&P stated.