Opulen Capital Life Settlement: Forcing the hand of Insurance Companies

The insurance industry has some justifiable reasons for not embracing the life settlements industry. With some brokers in the past selling policies with the intent of reselling them on the life settlements market, a practice now prohibited, life insurance companies cried foul. The practice was too predatory, and too often policyholders were duped into believing that it was a standard practice or worse, they weren’t told at all.

Also, the life insurance industry, as well as the life settlement industry, are still reeling from the effects of the strange-owned life insurance, or STOLI, deals of the past. The practice of buying a policy on a person without their knowledge or consent was indeed predatory and marred the status of reputable life settlement brokers, a scar that ran deep and has proven tough to heal.

That’s not the only reason life insurance companies are less than enthusiastic about life settlements. Consider that a small portion of life insurance policies lapse without any payment. According to the Insurance Information Institute, 7.7 percent of policies lapse each year. While that isn’t a large number, stretched out over a decade, it could spell a sizable profit for insurance companies. However, studies show that number is in decline – from 8.75 percent from 1995 to 2000. Could that be the effects of the life settlements market on the lapse rate? It’s possible. But don’t expect insurance companies to pay much credence to it.

One thing life insurance companies may be forced to do in the future is advise their policy holders of the option of selling their life insurance policies in a life settlements arrangement. Because the federal government is giving more attention to the regulations surrounding all financial areas, insurance companies and life settlements companies are being scrutinized under very similar microscopes.

In the near future, look for regulations that expand the fiduciary responsibility of financial advisors and insurance agents and brokers. With the life settlement market gaining some much-needed credibility and added interest thanks to the ability of life settlement deals to withstand recessionary pressures, life settlements are gaining ground as viable investment options.

Opulen Capital’s mission is to continue to provide the best solutions for our clients through the highest level of integrity and service. The strength of our business is our commitment to improve our client’s financial net worth. For more information on whether your policy qualifies for a life settlement arrangement, contact us at 877-678-5361 or visit http://www.opulencapital.com.