Life Settlement Market

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Life Settlement Market

Some current market trends in the life settlement market in the US include changes in eligibility requirements and the use of direct-to-consumer marketing. An overview of these trends is provided below.

Changes in Eligibility Requirements to Include Healthy Seniors

  • Life settlement companies are now expanding their eligibility criteria to include healthy seniors. Previously, these companies were mostly an option "for seniors who have had a decline in health since their policy was first issued."
  • These recent changes mean that healthy seniors can now "benefit from a life settlement" instead of lapsing or surrendering their policies.
  • This new sector could choose a life settlement because it can pay significantly more than if a policy is lapsed or surrendered. Life settlements may pay the same amount as the cumulative premium payments of the holder.
  • Another reason to choose a life settlement is the need of having more financial security or more money for retirement. Selling a life insurance policy may help end expensive premium payments while providing additional money to pay for healthcare and long-term care needs.
  • Healthy seniors could qualify for a life settlement if they own a guaranteed universal life (GUL) policy, are 75 years of age or older, and have a death benefit of at least $250,000.
  • According to the Stanford Center for Longevity, baby boomers "hold less wealth, carry more debt, and will face greater expenses than retirees a decade older than them." As there are over 71.5 million baby boomers in the US, there will be a large number of individuals who could run out of money in this country.
  • Some companies that have already changed their eligibility requirements include Lighthouse Life and Windsor Life Settlements.

Direct-to-Consumer Marketing

  • Recently, life settlement companies are investing in direct-to-consumer marketing to "bring awareness to policyholders."
  • The increment of this type of marketing by life settlement companies began in 2019. In previous years, providers and brokers got help from financial advisers and other professionals to identify clients who could benefit from a life settlement.
  • Direct-to-consumer marketing has benefited the industry as consumers are becoming "more aware of the option of selling their life insurance."
  • According to ALIR Settlements, this practice will continue to be a trend for the next few years.
  • Some examples of companies implementing this marketing method include Carlisle Management Company and Abacus.
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