Life Settlements What Sophisticated Clients Expect Their Advisors To Know

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Whitney Richards
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1 Life Settlements What Sophisticated Clients Expect Their Advisors To Know By Jason T. Mendelsohn, Paul W. Bowen, and Jon B. Mendelsohn, Ashar Group Life Settlement Specialists Market Summary The Life Settlement market has delivered more than $5.6 billion over the cash surrender value to consumers. (Government The market of years ago was often characterized as the wild west. grow at staggering rates. According baby boomers a day turning 65 numbers of seniors are relying on advisors to be their trusted resources with guidance towards decisions that encouraged to learn more about the their advisor during annual reviews to discuss surrendering or exchanging. Financial advisors who are knowledgeable about life settlements will be able to best serve their clients. market of many years ago. Life Settlement Alternative is Arguably 100 Years Old A life settlement is the sale or assignment of an existing life investor for an immediate cash institutional investor becomes the investors may offer an alternative to The Government Accountability a life settlement received on average owner following its issuance and may Who Represents Whom In A Life Settlement Transaction? There are two sides to a life settlement transaction: the seller which include the life settlement Reprinted with the permission of The Association for Advanced Life Underwriting

(Government The market of years ago was often characterized as the wild west. grow at staggering rates.

2 LIFE SETTLEMENT LAW January 2012 LIFE INSURANCE SETTLEMENT ASSOCIATION Life Settlement Regulation 2 Year Waiting Period Regulates Viaticals Only 4 Year Waiting Period Unregulated 5 Year Waiting Period Recently Passed Law to take effect in 2013 consumer. What Is The Sweet Spot For Most Buyers? Why Are More Sophisticated Investors Entering The Life Settlement Space? life settlements. The settlement market has stood legislation. There are times when investors entering the life settlement market. This asset class is not directly view life settlements as a method by which they can receive aggressive Winter 2012 The AALU Quarterly the following criteria to be the most minimal cash with a change of health since issue value and loans

Why Are More Sophisticated Investors Entering The Life Settlement Space? life settlements. The settlement market has stood legislation.

3 Use this Ashar Qualifying Test to determine if a life insurance policy may qualify for a Life Settlement. Complete the following section by adding the points that apply to the policy. Determine the probability based Please contact us if you have any questions. 1. AGE AND GENDER Points Score 2. MEDICAL CONDITION Healthy Senior Has minor health problems Health has changed considerably since policy issue Has serious health problems 3. SMOKING STATUS 4. POLICY TYPE Joint Survivorship or Whole Life Term Life Universal Life Joint Survivorship with one deceased 5. CURRENT CASH SURRENDER VALUE 6. OUTSTANDING LOANS 7. CURRENT PREMIUMS 3 11 TOTAL POINTS TOTAL SCORE LIFE SETTLEMENT PROBABILITY Please contact us to discuss factors Please contact us to obtain the proper state application Please contact us to obtain the proper state application QUALIFICATION REQUIREMENTS older the policy was issued contestability period Call for a Non-Binding Policy Evaluation & Appraisal ASHAR GROUP, LLC Thank you for using the AQ-Test. This worksheet provides a preliminary evaluation of a life settlement and does not guarantee approval or denial. All applicants are recommended to submit a complete application for a more in-depth review. Please contact Ashar with any questions. Reprinted with the permission of The Association for Advanced Life Underwriting We look forward to serving you soon!

MEDICAL CONDITION Healthy Senior Has minor health problems Health has changed considerably since policy issue Has serious health problems 3. SMOKING STATUS 4.

4 amount of cash value and health. When It Works It Works Success Story For The Right-Fit Client Life settlements are not always the Please review the following: Why Do Seniors Surrender Their Life Insurance Policies? needs settlement transaction. The advisor needs. The senior client then asks his advisor: thinking of surrendering it. broker dealers and others looking for to educate their organizations. When describing this scenario to a unknowingly listed their treatments their families. Potential Pitfalls - Need To Discuss With Every Client And Or Family Settlement Government Assisted Programs: terminates a life insurance contract is sold contract rules are followed. Other states have varying rescission STOLI Stranger Originated Life Insurance organizations mistakenly refer to life interchangeable. They are not. although many agents have brought them to the secondary market market are cautious and will not Settlement Association is working diligently with state insurance about the differences between seniors to choose the life settlement alternative. Mandatory Consumer Disclosure By Insurers As life settlement regulation and Kentucky have mandated disclosure of the life settlement the disclosure of alternatives (not through regulating insurance carrier Advisors have shared that it is a challenge to stay current and Winter 2012 The AALU Quarterly

needs settlement transaction. The advisor needs. The senior client then asks his advisor: thinking of surrendering it. broker dealers and others looking for to educate their organizations.

5 settlement broker as a resource. Prescreening Protects Client Relationship clients want to sell before taking saves both time and money for To learn more about the life this article and your involvement with We look forward to meeting and ABouT ThE AuThorS Jason T. Mendelsohn Jon B. Mendelsohn i Paul W. Bowen regarding Life Settlements. Reprinted with the permission of The Association for Advanced Life Underwriting

for To learn more about the life this article and your involvement with We look forward to meeting and

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