Life Settlement: Towards A Free Market for Life
Insurance
Copyright © Jon Thomas
Institutional Life Settlement Funders
http://www.life-settlementco.com
The Life Settlement market is all about providing due access to
needed cash from existing life insurance.
This so-called free market referred to as the life insurance
industry’s secondary market is based on a central premise,
namely that the value of life insurance is best determined by
independent market forces and has been validated in recent years
by its rapid growth. It is also amazing to see the value creation
and opportunities that this market presents. What it a life
settlement and why may it be an attractive financial alternative
to policy holders?
Various market providers in this sector of the industry are
focused on servicing viatical settlements, life settlements, and
senior settlements. Maximizing the profitable offering price for
your life insurance policy in what is commonly referred to the
secondary market for life insurance. Quite innovative, albeit
counter-intuitive, advocating looking at things from a totally
different perspective and finding new value in life insurance
Life insurance provides financial solutions to meet various needs
of businesses and families. Over time, however it also needs to
be dynamic and change with the holders and the/their demands. For
example as loans are repaid , key executives retire, estates
become smaller, businesses are sold, estate taxes are reduced —
or better yet, no longer exist of in cases where the policy
simply becomes too expensive it is definitely time to revisit
said policy.
Until just several years ago, individuals in the situations laid
out about above were facing a monopoly, a market situation in
which a seller can only sell to one buyer. Imagine if a
homeowner, after living in the home for many years, was told that
instead of being permitted to sell the home to any willing buyer,
he or she could only sell it back to the original builder at the
price determined by the builder. Clearly, no one would tolerate
such a situation for homeowners, but it has existed for life
insurance policy owners. For many years, policy owners have had
only one buyer for their policies — the life insurers. The advent
of a secondary market has lessened the monopoly power of life
insurers and created a free market for policy owners to create
value from and using their insurance.
Before the advent of the secondary market, life insurance
policies could not readily be sold, and it would have made little
sense to speak of a policy’s fair market value. By its very
existence, this new and growing secondary market for life
insurance bestows on every policy a fair market value like the
owner’s other financial assets. A <a href=http://www.life-settlementco.com
>life settlement</a> can now
be treated like any other financial vehicle.
Institutional Life Settlement Funders
http://www.life-settlementco.com
Jon Thomas has been involved in finance and insurance,
specializing in emerging growth markets since 1979.
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