Settlement offers for life policies

We are having great success obtaining settlement offers on term life policies that are nearing the end of their term.  These offers are contingent upon conversion and we always reimburse the conversion premium to the seller.  Whats even more exciting about these types of transactions is that we do not require life expectancy evaluations. 

We are also having great success placing ‘small face policies’.  Death benefits as low as $100,000.

HERE ARE REAL EXAMPLES OF CASES THAT HAS BEEN CLOSED RECENTLY OR ARE IN THE PROCESS OF CLOSING:

EXAMPLE #1

71 yr old man in good health

1 mil term conversion Genworth

This client was nearing the end of his conversion deadline.  He was going to lapse the policy if we could not make a settlement offer.  We settled the policy for $18,000 to the seller.  The 3^rd party LE was not required by the buyer.

 

Note: seller’s 3^rd party life expectancy was 194 months however it was not needed for the pricing process.

EXAMPLE #2

75 yr old man in relatively good health

1 mil Manulife

Not only was this policy going to lapse it was several months past the conversion deadline.  We were able to offer the seller $7,500 cash and pay the back premiums to put the converted policy in force.  The carrier was willing to accept the past due premiums. 

EXAMPLE #3

72 yr old female

250k Midland National UL policy

This woman was in relatively good health.  She could no longer afford the premiums on this UL policy.  We settled for $8,500 to her and she received a paid up death benefit for $15,000 that she is using for ‘burial insurance’.

EXAMPLE #4

61 yr old man

100k John Hancock Term policy

This gentleman is physically disabled due to a traumatic head and brain injury.  His health has been declining due to the injury.  He does not have a terminal illness.  

We were able to give him a $5,000 settlement.  This policy was bought as a term policy.  There was a commission paid to the agent on the settlement but the policy was not converted.

EXAMPLE#5

64 yr old male

500k AIG UL policy

Premiums were 2.4 % of face

Seller no longer needed this insurance policy.  His 3^rd party LE was 264 months.  The buyer conducted their own internal medical review.  There was ‘something about the case that they liked’.  The seller received $6,000.  

EXAMPLE#6

75 yr old man in relatively good health

1 mil Manulife

Again this policy was nearing the conversion deadline.  The owner had no interest in converting and maintaining the policy after conversion.  The policy was going to lapse.  The seller received $10,000. 

Note:  The 3^rd party life expectancy was 180 months but was not needed for the pricing process.

IA*s: Reaching New Heights Of Potential?

February 18, 2014 by Cyril Tuohy

You can’t fault insurance carries for wanting to promote their products by using a little branding hyperbole.

Words like “secure,” “income” and “protection” figure prominently in the marketing materials of life and annuity companies. After all, that’s what life and retirement insurers are there for: to protect families from longevity risk and unexpected calamities.

Now, Nationwide has jumped into the mix with its New Heights family of indexed annuities (IAs) promising “uncapped earning” potential for investors. This time, though, it is worth asking how much income potential there is available to investors.

For years, indexed products were capped. The insurance company promised investors a return of, say, 3 percent or 4 percent. If the index like the Standard & Poor’s 500 returned 10 percent, 15 percent or even 30 percent as it did last year, the investors made the wrong call. They would have made a lot more without a cap.

That’s how insurance companies limited the upside potential of their annuity payouts. Now Nationwide has entered into a deal to distribute uncapped designs for IAs, providing another choice in the annuity product shelves of financial advisors who will sell them.

“New Heights offers uncapped earning potential, a rarity in the fixed indexed annuity world,” said Eric Henderson, senior vice president of life insurance and annuities for Nationwide.

In the strictest sense, the “uncapped earning potential” claim is true. The catch, though, is that it isn’t likely to apply to the whole indexed annuity [investment]. A percentage of the premium is always redirected into a fixed [investment] bucket, said Sheryl J. Moore, president and chief executive officer of Moore Market Intelligence.

“Every indexed product limits gains,” she said.

Don Dady, co-founder of Scottsdale, Ariz.-based Annexus Group, told InsuranceNewsNet that removing the cap on an IA is designed to “harness market volatility.” The higher the market goes, the higher the return, but only to that uncapped portion of the annuity.

Annexus’ “sophisticated pricing model,” is poised to take advantage of new opportunities created by the volatility in the marketplace, Dady added. The ultimate judge of how well this product will fare will be left to the investor and his or her advisor.

Demand for indexed annuities is up over the past two years as more retirees look to secure income in addition to the money they receive from Social Security, defined benefit and defined contribution retirement plan distributions.

Sales of indexed annuities rose to $10 billion in the third quarter, an increase of 15.1 percent compared to the year-ago period, according to Beacon Research. Year-to-date indexed annuities sales ending in the third quarter were $26.9 billion, up 4.7 percent compared to the same period in 2012, Beacon said.

Total indexed annuity sales in 2012 reached $33.9 billion, up 5 percent from 2011, according to LIMRA.

IAs are on a roll, helped by the stellar performance of the Standard & Poor’s 500 index which delivered investment returns of nearly 30 percent last year. Taking even greater advantage of market upside by removing caps will only give IAs more sales momentum.

Removing the cap isn’t new, and there are plenty of uncapped annuity products around. Uncapped annuities, however, come with plenty of caveats ranging from lower participation rates, spreads or margins, and even mandatory fixed bucket allocations.

All these exceptions “greatly hinder” overall IA performance, according to the blog Annuity Think Tank.

Annexus, a designer and wholesaler of annuities, has had an uncapped IA in the market since 2006 under a proprietary arrangement with Aviva.


Adding Nationwide means Annexus now has two carriers with which it has proprietary IA arrangements.

Moore called the announcement with Nationwide “a big deal” for Annexus as it is the first time Annexus has entered into a partnership with a carrier other than Aviva. The deal is a way to retain insurance agents, she said.

In the next few weeks, Annexus will distribute New Heights annuities through Independent Marketing Organizations (IMO). Beginning in March, the IAs will be available to Nationwide’s exclusive agents, independent distributors and bank and wirehouse channels, Nationwide said.