Q: What is a life settlement?
A: A life settlement is the sale of an existing life insurance policy to an institutional buyer for a value greater than the cash surrender value and less than the death benefit.
Q: Is the life settlement market regulated?
A: Life settlements are available in all 50 states with 90% of the population living in regulated states.
Q: What type of buyers purchase life insurance policies?
A: Institutional buyers purchase policies. These can include state pension plans, endowments, reinsures, private equity, and more.
Q: Do direct advertisers and buyers shop the market to generate the highest offer for the policy owner?
A: No. Each buyer only represents their own investors that they have a fiduciary responsibility to and are looking for the best return. They are not required to disclose their fiduciary responsibility to the investor or the origination fees they earn. Their objective is to pay the least they can before an auction increases the bids.
Q: Who protects my client’s best interests in a life settlement transaction?
A: A licensed life settlement broker has a fiduciary responsibility to represent the policy owner/seller best interests in a life settlement transaction. A broker creates bidding competition between independent buyers that results in higher offers. Twenge Life Settlements accomplishes this through a secure, proprietary auction platform.
Q: How long does the process take?
A: It depends on the availability and sensitivity to timing for the policy owner. A broker can negotiate a quick offer; however, this would not allow the policy owner to benefit from true price discovery and buyer competition. Ideally, a policy owner would minimize future premiums and approach the market 90 days prior to needing the settlement proceeds.
Q: Do I save money eliminating my financial advisor or life settlement broker?
A: No. It's always best to have an experienced advocate representing the policy owner to minimize mistakes, save time, and facilitate the auction process. On average policy owners receive 6-8 times more than the original offer for the policy.
Q: Is it better to get a fast offer and forego the more comprehensive policy auction process?
A: No. It's like selling any asset or piece of property. The more time you take to best position the policy to interested buyers and create competition, the more you can maximize value during the process.