ORLANDO, Fla., Oct. 21, 2015 (GLOBE NEWSWIRE) -- Tens of thousands of American seniors, already struggling on fixed incomes that have been stagnant for years, are at risk to increases in their annual life insurance premiums they cannot afford to pay, according to a number of speakers this week at the Life Insurance Settlement Association’s (LISA) 21st Annual Fall Life Settlement & Compliance Conference.
The conference was opened with remarks from Cyndi Poveda, chair of LISA and chief executive officer of Life Equity LLC, who identified the “Cost-of-Insurance” issue as a key development in the life insurance industry that could potentially harm American consumers.
“Over the course of the past few months, thousands of policy owners have begun receiving letters from their life insurance carriers, informing them that due to a shortfall in corporate earnings, the companies will be increasing the ‘cost-of-insurance’ built into certain life insurance policies,” said Darwin Bayston, president and chief executive officer of LISA. “This is an especially disturbing surprise for seniors, many of whom trusted their insurance companies to stand by the annual premiums they were quoted at the time they agreed to purchase the policies.”
Earlier this month, The Life Settlements Report reported that five life insurance carriers have raised rates for this year, some by as much as 200 percent.
“What’s especially troubling is that the most recent of these notifications sent out by a life insurance carrier acknowledges that the cost-of-insurance increases are targeting policies owned by seniors over the age of 70,” said Steve Boger, managing director of Maple Life Analytics, LLC, one of the speakers at the LISA conference.
“Insurance companies have been notifying these policy holders that they have three options,” said Michael Brohawn, managing director of ITM TwentyFirst, another one of the conference speakers. “They can pay higher premiums in order to keep their existing death benefit, they can maintain the same premiums but sacrifice some of their death benefit on the policy, or they can surrender the policy back to the insurance company for its nominal cash value. This is obviously a really bad situation for the consumer.”
Other speakers noted that the life settlement option – the sale of a person’s life insurance policy to a third-party investor – is noticeably absent from the options presented to seniors. In a life settlement, the policy’s owner transfers the ownership of that policy in exchange for an immediate cash payment from the buyer. Candidates for life settlements are typically aged 65 or older, with a life insurance policy that has a death benefit of more than $100,000.
“Consumers need to understand they own their life insurance policy, which means they can keep it, sell it or surrender it,” said Jeffrey McGregor, a veteran of the life insurance industry and noted author, who delivered the opening keynote address at the conference. “They are entitled to know that they have options available to them if they decide they no longer want – or can no longer afford – their policies. One of those options is a life settlement.”
The LISA event, held October 18-20, 2015, at the Sandpearl Resort in Clearwater Beach, Fla., featured presentations from a number of other leading experts, including:
- Jeff Serra, the founder and chief executive officer of institutional investor Vida Capital, Inc., was interviewed by Poveda to provide an institutional investor’s unique perspective of the life settlement industry;
- Joseph Rotunda, director of the Enforcement Division of the Texas State Securities Board, addressed regulatory issues related to fractionalized investments in life settlements;
- Crystal Washington, a marketing expert and host of a weekly television segment, provided a range of tips and best practices regarding how to create an effective social media strategy; and
- Pamela Bancsi, director of Insurance Services for ValMark Securities Inc., a broker-dealer with 443 registered representatives nationwide, participated in a panel discussion focused on how to improve the life settlement transaction process.
About the Life Insurance Settlement Association
The Life Insurance Settlement Association (LISA) is the nation’s oldest and largest organization representing participants in the life settlement Industry, with a current membership of more than 90 companies doing business in all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands. The mission of LISA is to promote the development, integrity and reputation of the life settlement industry, to advance the highest standards of practice and professional development for the industry, and to educate consumers and advisors about a life settlement as an alternative to lapse or surrender of a life insurance policy. For more information, visit www.lisa.org.
Media Contact: Daryn Teague 805.358.3058 email@example.com
Source:Life Insurance Settlement Association