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May - June, 2006 |
Vol. 1, No. 1 |
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1. How do you see the premium finance phenomenon affecting the life settlement marketplace?
Legitimate premium finance programs with transparent business plans, offering a needed service and customer-controlled options at the end of the financing term, should not have any adverse impact on the settlement industry. Such products serve the interests of senior consumers seeking life insurance, while also producing revenue for the life insurance industry. The most immediate danger arises from short-sighted premium finance programs that have been carelessly designed without consideration for insurable interest laws, that are structured in a way that opens them to possible attack as settlement mills creating what are essentially settlement transactions from the beginning, or that offer illegal inducements. Many investors and settlement providers are wary of these issues and will decline to purchase premium financed policies unless they are provided with full disclosure of the lender’s financing program and documentation to enable them to conduct an independent due diligence review of the financing transaction that supported issuance of the policy. Although no one can precisely predict where the settlement market will be two years from now, the market should not be adversely affected by premium finance programs having no indicia of questionable practices if they are designed so that the insured has a real and substantial interest in the policy, including options that do not require a sale of the policy after two years or at the end of the loan term.
2. From a broker perspective what resources are available to help me train agents on the settlement industry?
Helping agents transacting life settlements for the first time get up to speed on the life settlement industry can be a daunting, but necessary task. Fortunately, there are a variety of resources available to brokers and agents that provide current insight and information on the ever-expanding life settlement industry.
First, agents should join the Life Insurance Settlement Association – formerly known as the VLSAA – which was developed as a nonprofit trade association for members of the life settlement industry, associated businesses and consumers. Since its inception, the LISA has been a leader in promoting responsible legislation and regulation of the industry. It has contributed conceptual and detailed language to actual laws governing the industry in most states throughout the United States. These efforts have resulted in improved public information, public awareness and created a competitive marketplace for the purpose of serving the consumer a valuable financial service.
In addition to providing industry information, the LISA offers referral services, licensing, legislation and regulation to its members. For more information about the association, call 407/894-3797.
Next, the Life Settlement Solutions’ Web site provides a plethora of industry-published articles on topics ranging from retirement and estate planning, charitable giving, key-man policies, industry regulation and more. Additionally, Life Settlement Solutions exhibits, speaks or provides workshops at all of the major industry conferences.
Finally, Life Settlement Solutions representatives are available to schedule a training session for brokers and agents. Session topics include an industry overview, an update on changing regulations, how to get started, ways to get back in touch with clients, and the Life Settlement Solutions difference.
For information about training sessions or articles authored by Life Settlement Solutions, contact Angie Robert at 858/244-4729 or arobert@lifefirms.com.
If there are topics related to the life settlement industry you would like us to address, please write to us at info@lss-corp.com.
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