CHICAGO, Dec. 17, 2018 /PRNewswire/ —¬†In 2008, an estimated $112 billion worth of life insurance policies simply lapsed due to non payment of premiums.¬† If the data were available for 2017, this number would likely be higher. It’s estimated that over 50% of seniors are not aware that a life insurance policy can be sold to a third party.¬† It is also estimated that 80% of all life insurance policies issued will simply lapse.
These are shocking numbers.¬† How can they possibly be accurate?
For starters, there is still a need for consumer awareness.¬† The majority of policyholders and financial advisors are simply unaware that a life settlement option exists.¬† Further, life insurance companies, in most cases, are not required to inform their clients of the life settlement option.¬† As a result, people may be paying their premiums for decades only to have the policy lapse when premiums become too burdensome.¬†
This can be a terrible shame for seniors but can be especially tragic for cancer patients who could use the money to fund treatments or care.
One bright spot is that regulation has returned to this market.¬† It’s reported that all but five states now regulate life insurance settlements.¬† This could be indicative of more investor capital entering this market, but the rate at which this is occurring is slow.
Companies that buy life insurance policies¬†tend to offer the resources that help policyholders make the best decision, even if that decision is to not opt for a life settlement and instead pursue the ‘accelerated death benefit’ or simply keep the policy active.¬† If a policyholder over the age of 65 is curious about the value of their policy on the secondary market, they can use a life settlement calculator¬†to get an instant estimate.
Windsor Life Settlements
Ken Kelly, CEO
SOURCE Windsor Life Settlements, LLC