Life Settlement Awareness

Here is an article from ifawebnews.com about the new California Life Settlement Laws…..

The Governor of California, Arnold Schwarzenegger has just ruled on how California Life Settlement business can be conducted.

California Gov. Arnold Schwarzenegger recently signed into a law a bill to regulate the state’s life settlement market that includes a ban on stranger-owned life insurance policies.

The Republican governor’s approval came one year after he vetoed similar legislation because it didn’t provide enough disclosures to consumers.

The law, authored by Sen. Ron Calderon (D-Montebello), chair of the California Senate Banking, Finance and Insurance Committee, mandates that policy owners not enter into a life settlement for at least two years after a policy is issued.

In STOLI arrangements, investors often solicit policy owners who are paid a small fee in return for turning over the life policy obtained in their name to investors. States have been battling over STOLI for several years.

The law prohibits life insurance companies from restricting lawful policy ownership transfers and from restricting their life agents from telling clients that life settlements can be an alternative to surrendering or obtaining the cash value of a life insurance policy.

The law also provides 30 days after signing or 15 days after receiving proceeds for a life settlement seller to change his or her mind and cancel the agreement.

California law now defines a life settlement as the sale of an existing life insurance policy to a third party for more than its cash surrender value but less than its net death benefit.

To read learn more about what this means for your life settlement business, click here….

Current Market Conditions have Created a Window of Opportunity for LS Investors

As a result of the factors listed below, investors are able to acquire life settlements at very aggressive rates, which a eventual result is strong returns for the investors.

1. Fall out from the financial crisis In late 2008, caused capital of major institutions to evaporate while banks scrambled to straighted up balance sheets lowering activity, including the purchase of life settlements.

2. There has been an alteration in the tables that calculate life expectancies. Recently, life expectancy projections on average were raised and that had a significant impact on amount and formulatino of investment returns.

3. Distressed Portfolios. Many funds and investors find themselves with insufficient reserves to maintain premium payments in this current economic crisis.

4. The number of sufficient policies has exceeded demand in many markets, do to those markets having less money available.  Investors have become much more selective and are in a position to “cherry pick” the best policies.

“The LS market rallied from 2005 until late 2008 when it hit the breaks along with the rest of the investment community. Investors now see a window of opportunity for increased returns given current market conditions and rates. Right now it’s a buyers market. There is no better time to consider the opportunity,” said MCC President, David Mickelson.

MCC projects, as more money comes in to the market and inventory is acquired, supply and demand will balance out and pricing will go up. Now is a time for investors to make inquiries, now while market conditions are optimal, and it is also a great time for individuals to have their policy evaluated.