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A Hidden Asset Comes to Life Presented by: Jim Quance The Life Settlement Alliance Inc. 2/05
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A Hidden Asset Comes to Life Presented by: Jim Quance The Life Settlement Alliance Inc. 2/05.

Dec 25, 2015

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Page 1: A Hidden Asset Comes to Life Presented by: Jim Quance The Life Settlement Alliance Inc. 2/05.

A Hidden Asset Comes to Life

Presented by: Jim Quance

The Life Settlement Alliance Inc.2/05

Page 2: A Hidden Asset Comes to Life Presented by: Jim Quance The Life Settlement Alliance Inc. 2/05.

WHAT IS A LIFE SETTLEMENT?

In its basic form, a life settlement is the transfer of a life insurance policy holder to a third party that promises to make all future payments in order to keep the policy active.

THE RIGHT FINANCIAL TOOL AT THE RIGHT TIME

Page 3: A Hidden Asset Comes to Life Presented by: Jim Quance The Life Settlement Alliance Inc. 2/05.

POTENTIAL APPLICATIONS:Changes in an insured’s financial condition where he

or she can longer afford to pay the premiums on the

policy.When LTC or retirement income takes precedence

over life insurance death proceeds.Individuals that want to convert future life insurance

DBs for current assets and uses such as gifts,

charities, or investments.Policies insuring buy-sell agreements when the owner

survives or when a firm is purchased by a third party.

Unneeded group or supplemental term insurance after

an individual retires.Business owned policies on the previous owner when

the business is sold.Charities that own a donated policy where they don’t

want to pay premiums.1035 Exchange

Page 4: A Hidden Asset Comes to Life Presented by: Jim Quance The Life Settlement Alliance Inc. 2/05.

&An Innovative

Wealth

Estate PlanningTool

LIFE SETTLEMENTS

Page 5: A Hidden Asset Comes to Life Presented by: Jim Quance The Life Settlement Alliance Inc. 2/05.

How much will be received for a policy?

There are many factors that determine the offer amounts:

AgePremiumsClient’s HealthType of PolicyInsurance Company RatingPolicy SizeCompetitive BiddingState of Residency

GENERAL RULE: Age, health and future premiums are the primary factors that determine the amount of the Life Settlement offer. Competitive bidding assures that you have found the highest offer.

PARAMETERS OF A LIFE SETTLEMENT

Page 6: A Hidden Asset Comes to Life Presented by: Jim Quance The Life Settlement Alliance Inc. 2/05.

MALE – Age 65$4,000,000.00 UL Policy

• Cash Value $90,000.00

• Retiring Executive

CASE HISTORY EXAMPLE 2

LIFE SETTLEMENT SOLUTIONSettlement Amount of

$525,000.00*Received $435,000 over surrender

Page 7: A Hidden Asset Comes to Life Presented by: Jim Quance The Life Settlement Alliance Inc. 2/05.

MALE – Age 69$3,000,000 Term Policy

• Surrender Value $0• Client Was Going to Surrender• Divorce Decree

SURRENDER EXAMPLE

LIFE SETTLEMENT SOLUTIONSettlement Amount of

$400,000.00

Page 8: A Hidden Asset Comes to Life Presented by: Jim Quance The Life Settlement Alliance Inc. 2/05.

MALE – Age 777 UL Policies Totaling $13 Million

• Premiums $400,000

• Surrender Value $1.8 Million

NEW PRODUCT EXAMPLE

LIFE SETTLEMENT SOLUTIONSettlement Amount of

$2,562,336.00*Agent sold client $27mil of current generation UL and VUL policies

Page 9: A Hidden Asset Comes to Life Presented by: Jim Quance The Life Settlement Alliance Inc. 2/05.

MALE – Age 68$750,000.00 Term Policy

• Surrender Value $0

• Client was going to surrender

SURRENDER EXAMPLE

LIFE SETTLEMENT SOLUTION

Settlement Amount of

$120,000.00

Page 10: A Hidden Asset Comes to Life Presented by: Jim Quance The Life Settlement Alliance Inc. 2/05.

AGE 84 – Minor Health Issues$450,000 Policy

• Premiums $32,000

• Buy/Sell Agreement

• Partner Died

• Deceased Partners

• Daughter Has Policy Rights

BUY/SELL EXAMPLE

LIFE SETTLEMENT SOLUTIONSettlement Amount of

$106,000.00

Page 11: A Hidden Asset Comes to Life Presented by: Jim Quance The Life Settlement Alliance Inc. 2/05.

Proactive Way to Speak

Lower Premiums/Better Policy

Better Interest Rate

Manage Expectations of Client

APPROACHING THE CLIENT

Page 12: A Hidden Asset Comes to Life Presented by: Jim Quance The Life Settlement Alliance Inc. 2/05.

Pay off debt

Fund charitable gift

Cash for a higher quality of life

Create funds to invest elsewhere

Cash to fund more cost effective

coverage

Alternative to surrendering or

lapsing a policy

BENEFIT TO THE CLIENT…

Page 13: A Hidden Asset Comes to Life Presented by: Jim Quance The Life Settlement Alliance Inc. 2/05.

PRODUCERS OPTIONS…

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.

Page 14: A Hidden Asset Comes to Life Presented by: Jim Quance The Life Settlement Alliance Inc. 2/05.

Referral fee from the life settlement transaction

BENEFITS FOR

THE FINANCIAL PROFESSIONAL

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

Page 15: A Hidden Asset Comes to Life Presented by: Jim Quance The Life Settlement Alliance Inc. 2/05.

MARKETING/ADVERTISING COLLATERAL Various marketing collateral is

available for the agents to use.

Registered agents can gain

access to the following:

Hi-res Advertising PDF files for

print, web or

direct mail

Qualifying Tri-fold Brochures

PowerPoint Presentations to

increase sales presentation

Custom designs can also be

created for top producers.

Print ready advertisements

custom

tri-folds

Mail stuffer

Page 16: A Hidden Asset Comes to Life Presented by: Jim Quance The Life Settlement Alliance Inc. 2/05.

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.

But most companies will consider VUL policies as securitiesBecause of being interest sensitive.

FRONT & BACK-END OF A LIFE SETTLEMENT

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.

Page 17: A Hidden Asset Comes to Life Presented by: Jim Quance The Life Settlement Alliance Inc. 2/05.

DOES MY STATE REGULATE VIATICAL AND/ORLIFE SETTLEMENTS?

Viatical/Life Settlements are regulated by state Insurance Departments. Some states have enacted statutes addressing the sale of life insurance policies insuring non-terminally or chronically ill individuals and some only laws that only regulate the sale of life insurance policies insuring terminally or chronically ill individuals and others do not regulate the transaction at all.

Of those states that regulate the transaction, most require both the Viatical/Life Settlement Broker (facilitator of the transaction) and Viatical/Life Settlement Provider (purchaser of the policy) to be licensed.

Page 18: A Hidden Asset Comes to Life Presented by: Jim Quance The Life Settlement Alliance Inc. 2/05.

Delaware

Indiana

Maryland

Massachusetts

Nevada

New Jersey

Oregon

Pennsylvania

Virginia

Washington

LSA IS LICENSED IN THE FOLLOWING STATES…

Arkansas Tennessee

Connecticut Utah

Florida Wisconsin

Kentucky

Maine

Minnesota

Montana

Nebraska

North Dakota

Ohio

Alaska

Louisiana

Texas

Page 19: A Hidden Asset Comes to Life Presented by: Jim Quance The Life Settlement Alliance Inc. 2/05.

EASY STEPS TO QUALIFY A CASE

Evaluate existing book of business - clients over 70 years or any clients living with a serious illness

Recognize changing needs or circumstances of your clients.

Call toll free 1.800.871.9440 or visit www.lsalliance.com for a FREE non-binding appraisal of the policy

Approach client with proposal to sell their policy and purchase a product that better suits their needs

Client completes the application

LSA will provide underwriting services

LSA will negotiate and obtain offers or declinations

Total processing time is 4-6 weeks.

Page 20: A Hidden Asset Comes to Life Presented by: Jim Quance The Life Settlement Alliance Inc. 2/05.

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:

1. Collecting of policy and medical information

2. Complete initial underwriting of case

3. Send complete case to funding organizations

4. Negotiate and obtain offers or declinations

5. Communicate appraisal value and compensation

Completing the Settlement Process:

1. Contracts are delivered to the policy owner

2. Review, sign and return of settlement package

3. Recorded changes by insurance carrier

4. Escrow organization releases cash settlement to client

5. Client rescission period– Dependent on state

6. Referral source is compensated– Post rescission period

Page 21: A Hidden Asset Comes to Life Presented by: Jim Quance The Life Settlement Alliance Inc. 2/05.

The Life Settlement Alliance Inc. is a network of financial companies, advisors and agents whose combined efforts and strengths are used as leverage in the life settlement market.

The knowledgeable staff at the Alliance, utilizing their expertise in the industry, have facilitated the sale of life policies since 1994.

We offer a very attractive referral and incentive program. In addition, we provide marketing, advertising, and compliance support for our network of national insurance agents, producers and financial professionals.

For more information on LSA, contact Jim Quance at 1.800.871.9440 x 308 or [email protected]

Page 22: A Hidden Asset Comes to Life Presented by: Jim Quance The Life Settlement Alliance Inc. 2/05.

200 East Broward Blvd., Suite 1135 • Fort Lauderdale, FL 33301