Transcript No Slide Title

Presented by
03/2006
WHAT IS A LIFE SETTLEMENT?
A life settlement is the sale of an
existing life insurance policy that
gives the policy owner a cash
settlement in excess of the current
cash surrender value.
47% of seniors over the age
of 65 own life insurance
policies.
– Bernstein Research 2005
WHAT TYPES ARE INCLUDED:
Universal
Whole Life
Term
Variable
Joint
Group
Key Man
WHO MAY QUALIFY?
Anyone over the age of 65 years who has life
insurance whose circumstances have
changed since the original policy was issued.
Health
Personal
Financial
The Life Settlement market
grew to $5.5 Billion in face
amount in 2005 thanks to
available capital and
continued aggressive
marketing to producers.
– Conning Research 2005
>> PRODUCERS FINANCIAL PLANNERS ATTORNEYS ESTATE PLANNERS NON-PROFIT ORGANIZATIONS
CHANGING CIRCUMSTANCES…
Under-Performing Policies
Estate Size Reduction
Family Issues
Divorce or Bankruptcy
Deterioration of Health
Retirement
Sale of Business
Death of Spouse
Estate Tax Reform
1035 Exchange
&
LIFE SETTLEMENTS
An Innovative
Wealth
Estate Planning
Tool
>> PRODUCERS FINANCIAL PLANNERS ATTORNEYS ESTATE PLANNERS NON-PROFIT ORGANIZATIONS
RECENT LIFE SETTLEMENTS
TWO TYPES OF PROSPECTS
Those who no longer need insurance
Those who are utilizing a Life Settlement
to fund an alternative investment
59% of life settlement clients are
between the ages of 71-80.
– National Underwriter Magazine 2005
CASE HISTORY EXAMPLE 1
FEMALE – Age 72
$3,000,000.00 UL Policy
• Small Cash Value
• Under-Performing Policy
LIFE SETTLEMENT SOLUTION
Settlement Amount of
$840,000.00
*Insured purchased an annuity with the proceeds
CASE HISTORY EXAMPLE 2
MALE – Age 65
$4,000,000.00 UL Policy
• Cash Value $90,000.00
• Retiring Executive
LIFE SETTLEMENT SOLUTION
Settlement Amount of
$525,000.00
*Received $435,000 over surrender
LAPSE EXAMPLE
MALE – Age 69
$3,000,000 Term Policy
• Client Was Going To Lapse
• Divorce Decree
LIFE SETTLEMENT SOLUTION
Settlement Amount of
$400,000.00
NEW PRODUCT EXAMPLE
MALE – Age 77
7 UL Policies Totaling $13 Million
• Premiums $400,000
• Surrender Value $1.8 Million
LIFE SETTLEMENT SOLUTION
Settlement Amount of
$2,562,336.00
*Agent sold client $27mil of current generation UL and VUL policies
BUY/SELL EXAMPLE
AGE 84 – Minor Health Issues
$450,000 Policy
• Premiums $32,000
• Buy/Sell Agreement
• Deceased Partners
LIFE SETTLEMENT SOLUTION
Settlement Amount of
$106,000.00
New
BUSINESS
Opportunities
MULTIPLE COMMISSIONS
FROM ONE STRATEGY
Referral fee from the life settlement transaction
Trailer commission on policy for agent of record
Investment or annuity commissions from the capital
created from the life settlement transaction
Commission on new life insurance products that
better suits your clients current needs
Commission on the conversion if the policy being
considered is a term product
Commissions for referring other agents or agencies
to Life Insurance Settlements Inc.
SETTLEMENT TIMELINE
Upon Receiving the Following:
1.
Complete application & sign authorization
2.
Copy of photo identification
3.
Copy of policy, if obtainable
Appraisal Process Consist of:
Completing the Settlement Process:
1.
Collecting of policy and
medical information
1.
Contracts are delivered to the
policy owner
2.
Complete initial
underwriting of case
2.
Review, sign and return of
settlement package
3.
Send complete case to
funding organizations
3.
Recorded changes by
insurance carrier
4.
Negotiate and obtain
offers or declinations
4.
Escrow organization releases
cash settlement to client
5.
Communicate appraisal
value and compensation
5.
Client rescission period
– Dependent on state
6.
Referral source is compensated
– Post rescission period
Powerful New
FINANCIAL
PLANNING
Tool…
PARAMETERS OF A LIFE SETTLEMENT
How much will be received for a policy?
There are many factors that determine the
offer amounts:
Age
Premiums
Client’s Health
Type of Policy
Insurance Company Rating
Policy Size
Competitive Bidding
State of Residency
GENERAL RULE: Age, health and future
premiums are the primary factors that determine
the amount of the Life Insurance Settlements, Inc.
offer. Competitive bidding assures that you
have found the highest offer.
APPROACHING THE CLIENT
Proactive Way to Speak
Lower Premiums/Better Policy
Better Interest Rate
Manage Expectations of Client
LIS IS A NETWORK OF FINANCIAL
ADVISORS & AGENTS
Combined Strengths
Maximum Compensation
Unparalleled Expertise Since 1993
Marketing & Advertisement Support
Exceptional Service
Continuing Education Programs
As the industry grows, the
progression of stronger
marketing tools will be essential
to educate the consumer about
the industry and the benefits
that are available.
PROVIDER PARTNERSHIPS…
Exclusive Funders
Long-Term Relationships
OUR CORPORATE OFFICE IS LOCATED AT
550 WEST CYPRESS CREEK ROAD, SUITE 300
FORT LAUDERDALE, FL 33309
COMPLIMENTARY SERVICE
Core Competencies
Value Add
Building A Significant
Profit Center
61% of Agents stated they believe there is a
substantial
potential for additional income from Life
Settlements.
– Agent’s Sales Journal Life Settlement Survey 2005
BENEFITS TO THE CLIENT…
No Cost
Liquidity
Fund Alternative Product
to Fit Current Needs
Relief of Premium Expense
Create a Better Solution for
their Current Needs
EXAMPLES OF TAX BENEFITS
The following example shows a typical policy with
a face value of $1 million, $55,000 of premiums paid
and a cash surrender value of $70,000. For example
purposes we will use a settlement amount of $200,000
paid to the policy owner. The tax position would be:
* Tax obligations will vary with the sale of an insurance policy. Life Insurance Settlements,
Inc. does not make any representations as to the tax treatment of a sale of a life insurance
policy. Life Insurance Settlements, Inc. strongly encourages you to consult with your tax
advisor, Attorney or financial planner as it relates to your specific situation.
FRONT & BACK-END OF A LIFE SETTLEMENT
FRONT-END: If a policy owner sells a policy to a licensed
settlement provider and the transaction has been
consummated in accordance with the state’s viatical and life
settlement laws and regulations (front-end), the client and his
insurance advisor have not participated in a transaction
regulated as a security.
BACK-END: If an insurance advisor is raising funds for
financing entities or reselling purchased policies to
individual investors (back-end) this, according to most
states, would constitute a security.
PREQUALIFICATION RESULTS…
Clients who qualify for life settlements
can see what the highest purchase
offer is.
If they choose to accept the payment, they
have added bottom-line dollars to their
asset base.
Those who don't qualify, they will find out
the total liquidation value of that asset.
Therefore they will be able to properly
re-calculate their net worth and know
their true financial picture.
550 WEST CYPRESS CREEK ROAD, SUITE 300 • FORT LAUDERDALE, FLORIDA 33309
TOLL FREE 866.326.LIFE • FAX 954.315.2841 • WWW.LISETTLEMENTS.COM
Disclaimer: Life Settlement amounts are based on numerous factors. The case examples are for illustration purposes and does not
represent future or previous offers, statements, percentages or amounts. Actual results will vary. The industry average purchase price
obtained by viators ranges from 12-24% of the face amount of a qualified life insurance policy. Some or all of the proceeds of a life
settlement may be taxable under federal or state income tax laws from the sale of one's life insurance policy. Advice from a
professional tax advisor is recommended. Life Insurance Settlements, Inc. is a licensed broker or producer in the following states: AL,
AR, AZ, CT, DE, FL, GA, HI, IA, ID, IN, KS, MD, ME, MN, MS, NC, ND, NJ, NM, NV, NY, OH, OK, OR, PA, TX, UT, VA, VT, & WI.