The secondary market for life insurance is an emerging financial market that provides individuals options with their policies. These options allow policyholders to benefit from the actuarial value of their life insurance. Policies are sometimes a financial burden, especially for seniors as premiums often increase over time. The secondary market offers financial alternatives that can help seniors benefit from their life insurance now.
GWG Life offers unique financial services based in the secondary market for life insurance. Over time, life insurance premiums often increase, sometimes creating a financial burden for seniors. Life circumstances also change, and the policy may no longer be needed. GWG Life offers services that may allow policyholders to benefit from the actuarial value of their life insurance. Surrendering policies or allowing them to lapse results in significant losses for individuals who have been paying premiums on their policies for years. GWG Life provides solutions for seniors in this situation, now, when they need them most.
No. Any type of life insurance can be considered for GWG Life’s services. Most individuals eligible for our services hold Permanent life insurance policies. The best examples are Universal Life (UL), Term Convertible to Universal Life, and Joint Survivorship Universal Life (SUL). Term policies can often be converted into UL without any additional underwriting requirements by the life insurance carriers. Variable Universal Life (VUL) may be considered as well. Whole life insurance policies typically have a large amount of cash value built up within the policies, and require high premiums, sometimes making these policies ineligible for our services.
As you might imagine, the value of your policy will depend on many factors. However, the key factors are:
GWG Life will use the information above, along with a policy illustration provided by the insurance company, to calculate a policy value. The calculation is based on a complex financial and actuarial model, applied to the specific details of your own policy and life expectancy information. The calculation generates a policy value that represents GWG Life’s assessment of the economic present value of the policy today. This value is often much higher than the current cash surrender value offered by the insurance company. As a rule of thumb, for those policies that end up being transacted upon have values that will typically range between 10 to 25 percent of the policy face amount.
In general, the overall process takes between 90 and 120 days. The first step is to assemble necessary documents, like a current illustration of the life insurance policy from the carrier. Once the proper documentation is received, the policy and supporting documentation is reviewed and priced by GWG Life. This happens very quickly, typically one or two weeks. The closing process typically takes an additional 30 to 60 days to complete the transaction.
We typically provide our services to policyholders who are 65 years or older. However, without significant health impairments, the individuals who use our services are more likely to be age 75 and older. But even younger insureds can qualify, depending on the level of their health impairments.
For the vast majority of states, transactions involving the secondary market for life insurance are regulated by each state’s department of insurance. GWG Life is licensed by the department of insurance in the states in which it provides services. Also, most states require all forms used in the transaction to be reviewed and approved to assure clarity and fairness to protect the owner of the policy.
The Life Insurance Settlement Association (known as “LISA”) is the trade association group for the secondary market for life insurance. You can visit their website at www.lisa.org to find a significant amount of information about life settlements. Specifically, on the Industry tab within the site, you will find an Education Center which is a very good source of knowledge about the industry. Your state department of insurance might be also able to assist you by answering questions related to life settlements. In general, state departments of insurance are the regulatory authority over the secondary market for life insurance. They are in charge of licensing and enforcing the rules and regulations related to life settlement transactions.