LISA Launches New Website to Educate Consumer Advisors about Life Settlements

This month, LISA rolled out a new state-of-the-art website, which delivers important information about why life settlements may be an attractive alternative to lapsing or surrendering a life insurance policy.

The site,, is conveniently organized with highly relevant information for two unique audiences: Life Policy Owners and Consumer Advisors. The Consumer Advisors section of the site was built to serve as an important free resource for financial advisors, insurance agents, accountants, attorneys and other professionals who are in a position of providing counsel to seniors and their family members regarding important financial planning decisions.

The section consists of the following key areas of content:

  • “Why Sell?” – a basic tutorial of life settlements and descriptions of various scenarios in which advisors may want to consider recommending a life settlement to a client;
  • “Candidates” – straightforward presentation of who is (and who is not) a good candidate for a settlement;
  • “Policy Value” – brief explanation of how a life insurance policy is potentially valued on the secondary market;
  • “Helping Clients” – an important summary of how consumer advisors can fulfill various aspects of their ethical responsibilities to their clients by learning more about life settlements;
  • “Benefits to You” – a candid assessment of how advisors can directly and indirectly benefit by recommending the life settlement option to appropriate clients; and
  • “Sales Process” – a detailed roadmap to how the life settlement transaction unfolds for qualified clients who choose to pursue a settlement.

The Consumer Advisors section of the new LISA website contains objective information, much of which is supported by independent data. The content is purely educational and does not solicit any transactions, although advisors are able to search the LISA database to identify a licensed life settlement professional in their region whom they may wish to contact for more information.

Finding life settlement content on LISA’s new website will also be much easier, thanks to a smart “auto-complete” search platform that is fast and easy to use.  The site also features a new educational resources landing page that allows a policy owner to sort content based on different categories and stages of the life settlement transaction, along with the ability to narrow results by different media types such as videos, news, blogs, white papers, brochures, etc.

LISA’s website also includes an “Industry Resources” section with a wide range of free content that will be especially useful to consumer advisors seeking to educate themselves about the industry. For example, that section of the site explores the history of life settlements in the U.S., the evolution of life settlements regulation, a comprehensive analysis of state legislation governing life settlements, and a simple timeline that graphically illustrates how the industry has grown over the years.

Other sections of the site consist of an About LISA section, information regarding upcoming LISA events, and details about how a life settlement professional or industry service provider can become a member of LISA. To check out the new site, please go to

The $112 Billion Life Settlement Opportunity: Join Us as We “Make History” in Boston

"We're making history"

21st Annual Spring Life Settlement Conference “We’re making history”

The great city of Boston is known for its historical significance in the birth of the American idea. In the decades that have followed, Boston has been at the heart of our nation’s pursuit of intellectual curiosity and financial innovation.

For these reasons, Boston is a fitting place for the 21st Annual Spring Life Settlement Conference, sponsored by LISA. The event – whose theme is “Making History in Boston” – will take place on May 3-5, 2015, at the Hyatt Regency Boston.

Making history in Boston is about a “do-over” of awareness and marketing to the 97% of American seniors and their respected advisors who have little or no knowledge about the financial value a life settlement may offer . . .

Making history in Boston is about realizing the need to restructure the life settlement market to penetrate and accommodate an environment that could realize a 25 times increase in policy submissions in the next two to three years . . .

And making history in Boston is about preparing our industry for the potential $112 billion opportunity on the horizon: that is the astounding face value of policies held by American seniors over the age of 65 that are lapsed or surrendered each year.

Our Spring Life Settlement Conference will provide important educational information to attendees with a number of thought-provoking sessions, such as the following:

Harvard University’s Dr. Lauren Cohen will lead a discussion about whether the industry can adapt to the structural changes necessary to accommodate a $50+ billion life settlement market;

  • A panel of industry executives will engage in a discussion that will challenge the evolving nature of the current life settlement transaction;
  • An Internet marketing expert will join the LISA staff for a presentation about the absolute need to be on the forefront of digital communications to seniors and their advisors;
  • Simon Erritt, chairman of the European Life Settlement Association, will reveal developments in the international markets that may represent new opportunities; and
  • A panel of legal experts will review the latest industry litigation and regulatory developments that could have a profound impact on the market.

The conference will also include the Annual Meeting of LISA members, where five directors will be elected as part of the nine-member LISA Board of Directors. LISA members are encouraged to come to the Annual Meeting and discuss ideas about LISA’s strategy of serving its members and representing the industry.

We invite you to join us in Boston, May 3-5, and make history! For more information about conference registration, please go to or contact Shannon Fleshman at

LISA Partners with Member Firms to Promote Life Settlements at RIA Summit

As part of our pro-active campaign to educate Americans about life settlements as an important option for seniors, LISA recently created a national “speakers bureau” program in which we’re partnering with member firms to place thought leaders from our industry on the podiums of select conferences. We’ve already secured two such speaking engagements and have several more opportunities in the works.

As part of our pro-active campaign to educate Americans about life settlements as an important option for seniors, LISA recently created a national “speakers bureau”

As part of our pro-active campaign to educate Americans about life settlements as an important option for seniors, LISA recently created a national “speakers bureau”

The first one took place last week at the Registered Investment Advisors (RIA) Summit in Las Vegas. I had the privilege of moderating a panel discussion that included Gary Brown, chief executive officer of CMG Life Services Inc., and Clay Gibson, Senior Portfolio Manager, Vida Capital.

Our goal for the session was to provide an overview of life settlements and to position them as an attractive non-correlated alternative asset class for institutional investors. We set out to educate the audience about how institutional investors are exploring the life settlement market, uncovering value and finding new business opportunities.

Some of the highlights covered in our session included:

  • It is settled law that life insurance is personal property and it is the right of an insured/policyholder to sell their life policy;
  • Over the course of the next decade, the life settlement market will exceed $100 billion of face value annually, fueled by the aging baby boom population that will be seeking to augment their financial needs for retirement and rising health care costs;
  • Forty-two states regulate life settlement transactions and six have moved to require insurance companies to advise policyholders of the availability of a life settlement as an option to lapsing their policies;
  • Over the past five-plus years, the secondary market has become a respected environment where billions of dollars in face value of life insurance policies can be transacted between policyholders and institutional investors.

This panel discussion created a platform for LISA to partner with two of our member firms to provide an overview of the market, discuss the current practices and trends in transacting business, and provide insights from lessons of the past and future opportunities for this unique asset class. Gary and Clay also had the opportunity to meet one-on-one with RIA members and discuss specific business development opportunities.

There are still a number of conferences we would like to target for LISA-moderated panel discussions regarding life settlements. If you would like more information about how your firm can participate in the LISA Speakers Bureau, please contact Wesley Costa at

Lapsed Life Insurance Policies: An Astounding Number


The number and amount of lapsed life insurance policies by U.S. seniors over age 65 is astounding: more than 250,000 policies with a combined face value of more than $57 billion are lapsed and surrendered back to life carriers each year. The average face value of those policies is approximately $225,000.

And that only includes universal and variable life policies that most people think are best-suited for life settlements. If term life is added, which often includes policies that are also attractive for life settlements, and ordinary life policies, the total exceeds $112 billion.

Lapsed Life Insurance Policies: An Astounding Number

Lapsed Life Insurance Policies: An Astounding Number

These amounts are based on publicly available information as of 2010. The number and amount of face value of policies today is certainly greater.

John Welcom, founder and chief executive officer of Welcome Funds, presented this research earlier this week at LISA’s Fifth Annual Institutional Investor Conference in New York. Previous studies have provided estimates about the overall size of the life settlement market based on analyzing the total amount of life insurance inforce. This is the first work that is based on the number and face value of policies lapses and surrendered back to life carriers.

What makes the study relevant? It validates the need for a marketplace where seniors who have policies that are no longer needed or perhaps affordable can realize a value often many times greater than its cash surrender value. The study provides the foundation for LISA’s mission to educate American consumers and their financial advisors about an important option for potentially unlocking billions of dollars of hidden value in life policies that could provide valuable financial resources in retirement.

Think about it. Seniors who held more than 250,000 life insurance policies either unconsciously or knowingly allowed those policies to lapse. Billions of dollars of potential “real value” was surrendered back to life companies for no value.

Meanwhile, a survey by the Insurance Studies Institute reported that less than 50% of seniors are aware about the option to consider selling their life policy. Further, 90% of seniors who had lapsed a policy would have considered selling it if they had known a life settlement was an option.

Thanks to this new research, we now have a benchmark for the serious amount of financial value available to seniors over age 65 from the possible sale of their life insurance policies. Now more than ever, there is an enormous need to educate seniors and their advisors about the alternatives available to lapsing their life insurance policies.

LISA must take on the responsibility to provide this consumer education and to help foster a robust life settlement market.

The Myth of the 150th Birthday: Science and Life Expectancy

You’ve likely heard it said that the steady increase in life expectancy over the past several decades is evidence that advancements in medical science have enabled us to extend human life and that it will soon become common for Americans to live to be 125, 135 or even 150 years old.

 Well, maybe not so fast.

The Myth of the 150th Birthday: Science and Life Expectancy - Life Settlement - LISA.ORG

The Myth of the 150th Birthday: Science and Life Expectancy

At the Life Insurance Settlement Association’s 2014 Annual Fall Life Settlement and Compliance Conference, which was held last month in Scottsdale, Ariz., the keynote speaker for the general session was Jay Olshansky, Ph.D., professor at University of Illinois at Chicago’s School of Public Health. Dr. Olshansky reviewed some of his research into estimating the duration of life, which indicates that although advancements in science and medicine are extending the average life expectancy for Americans, it is unlikely to ever create conditions where Americans are routinely able to live 100 years or more.

“In spite of what you may read on magazine covers and newspaper headlines, the truth is that the timing of death in human beings has never really changed,” said Dr. Olshansky. “It’s certainly true that a larger number of people are living longer today than in the past – and that trend will continue – but life span itself is unlikely to change and we’re just not going to see a whole generation of Americans suddenly living to be 120 years old. We have fewer infant deaths than we did in the past, but in return we now have more people dying from cancer, heart disease and dementia in their 80s.”

Having attempted to bust the myth of the 150th birthday, Dr. Olshansky and his academic colleagues have dug deeper into the data regarding life span and have also turned up a startling conclusion with broad social implications: the gap between the life spans of highly educated Americans and their uneducated peers is as much as 15 years.

 “There really are two Americas,” said Dr. Olshansky. “The best-educated among us are doing very well financially and living longer, but the least-educated of us are lagging far behind economically and experiencing declines in health that lead to shorter lifetimes. In studying life expectancy tables, even a one-year gap would be large; a 15-year gap is simply monumental.”

Dr. Olshansky’s work is part of a body of research that is allowing academics and actuaries to more precisely model life expectancy among various population groups in the U.S. This new scientific research is extremely important to the life insurance industry as it has profound implications for underwriters who ultimately frame the way that insurers set premiums for each unique policy they issue. It’s also of great importance to the burgeoning life settlement industry as it helps consumers, financial advisors and investors all obtain a more transparent and predictable understanding of which life insurance policies are appropriate for settlement.

All of us in the life settlement market – consumers, advisors, brokers and investors – benefit from more accurate data and a more precise understanding of life expectancy. We should be open to innovative research into human longevity and be willing to challenge our traditional thinking about life expectancy when new data becomes available, even if that research and new data seems out of the box to us at first glance.

And if Dr. Olshansky’s research is correct, the first lesson to be learned is that the birthday cake with 150 candles on top isn’t likely to be making an appearance in your kitchen any time soon.

Life Settlement Association adds keynote speakers and attorneys from high profile case Larry Grill, et al. v. Lincoln to its Fall Conference Oct 5-7.


The Life InsuranceLISA-Blog Settlement Association (LISA), which educates consumers and financial advisors about options for unlocking the hidden value in life insurance policies, today announced a key addition to its final agenda for its 2014 Annual Fall Life Settlement and Compliance Conference on October 5th-7th at the Omni Scottsdale Resort & Spa in Scottsdale, Ariz.

Key speakers and attorneys, Gordon A. Schaller, prominent tax and estate planning attorney in Southern California, Partner, Jeffer Mangels, Butler & Mitchell LLP, along with Daniel L. Warshaw, civil litigator and trial lawyer, partner of Pearson, Simon & Warshaw, LLP, will be present and provide an overview of the recent lawsuit that has drawn nationwide attention, Larry Grill, et al. v. Lincoln National Life Insurance Co., filed in federal district court in California. In this case, the owners of a life insurance policy brought suit alleging claims for fraudulent concealment stemming from the carrier’s failure to inform them of the existence and possibility of selling their policy into the secondary market.

“This is an important case for the life settlement industry because it’s one of the first lawsuits alleging that life insurers have an affirmative obligation to disclose the existence of the life settlements option” said Darwin Bayston, President and CEO of the Life Insurance Settlement Association.

While nearly 80 percent of baby boomers and seniors are interested in life settlements as a means to supplement retirement finances, many seniors — and many of their financial and legal advisors — are not aware that a life insurance policy is personal property and may be sold as a life settlement for a value greater than its cash surrender value. “As a result, billions of dollars (face value) of policies that are no longer needed, wanted or affordable are lapsed and surrendered back to life insurance carriers by seniors who might have sold them for a cash payment” says Bayston.

Gordon A. Schaller along with Daniel L. Warshaw  are scheduled to speak on Monday October 6th at 2:30 PM.


Why agents can’t mention life settlements

Why agents can’t mention life settlements

Why agents can’t mention life settlements?

At a recent conference, we were stunned when we asked the agents, advisors and registered reps in the audience if they would recommend the life settlement option to a client. A number of participants said they would like to do so — and many indicated they had actually seen cases where their clients would have truly benefitted from selling an unwanted, unneeded or unaffordable life insurance policy on the secondary market — but couldn’t because their insurance company or broker-dealer did not allow participation in the life settlement market.

This has been an ongoing issue for years. Independent and captive agents or representatives of large carriers or broker-dealers operate at the behest of their employers or employee contracts, some of which ban participation or even discussion of the life settlement option to their clients. We are of course not advocating that agents or reps violate contract or employment law; we are simply trying to get to the core of why the carriers and B-Ds won’t allow such discussion or disclosure.

Aside from “protocol won’t allow for it,” carriers’ concerns range from the impact of lower lapse rates on profitability to potential loss of tax-free buildup of cash value within the policy to suitability concerns and due diligence issues. B-Ds cite the risks associated with increased compliance burdens and FINRA standards as reasons for not allowing participation.

Understandable, if this were 2006.

Some years back a large carrier cited “potential for abuse” and an “unsettled tax and regulatory climate” as reasons their agents are “strictly prohibited” from participating in the market — and we would be willing to bet similar language exists in other companies’ manuals, too. Our response: rest assured. The market is approaching full regulation around the U.S., with 42 states and Puerto Rico containing some form of comprehensive life settlement regulation. As for the potential for abuse, there have been only three closed consumer complaints nationwide involving life or viatical settlements since 2011, according to the National Association of Insurance Commissioner’s Consumer Information Source. This pales in comparison to the more than 8,000 complaints against insurance carriers for delays in paying claims, and that’s just in 2014, alone!

Please click below to read the entire article.

Supply and Demand for Life Settlements Growing

Supply and Demand for Life Settlements Growing

Supply and Demand for Life Settlements Growing

While some speak about the quantity of policies decreasing from its former highs, the truth is that we are seeing more policies that are eligible to purchase since the decline of 2008. In my view, the market is robust and getting stronger. The quantity of manufactured paper and other “junk” that has no value to life settlement investors has become near non-existent and the quality of the policies in the market has dramatically increased.  Thus the percentage of policies that can be purchased has actually increased.  This is due to the market players becoming more sophisticated and understanding what policies have the highest probability of being purchased.  It is also the result of increased consumer awareness.  Several states now require life insurance carriers to notify policy owners about the life settlement market, when they are about to lapse a policy and Medicaid statutes in several states have proposed to use life settlements to fund health care.  These measures and concerted efforts by the Life Insurance Settlement Association and the industry is raising the awareness of policy owners of the life settlement option.

Investor demand is also quite high.  RIAs continue to allocate to life settlements in an effort diversify into an alternative asset class that has little correlation to the equity markets.  Institutional investors also appreciate the potential for outsized risk-adjusted returns.  When one considers the normally high credit ratings of insurance carriers, the potential returns of life settlements can be attractive, particularly in today’s low-interest environment where fixed income returns are difficult to come by.  While returns are a leading driver for investors, they also see greater regulation providing protections for consumers and more certainty for the assets themselves.

In short, both the supply and demand for life settlements is growing.  To continue this trend, the industry needs to change the discourse. Life settlements have changed.  Regulation protects sellers.  Institutions have brought consistent capital and best practices to the market.  States have recognized the value of life settlements through disclosure laws and Medicaid statutes.   Consumers can look at life settlements as a viable option to consider.

As the life settlement message becomes clearer, more policies will come to the market.  As investors continue to see the potential for outsized risk adjusted returns with low volatility, more capital will come to the market, driving up the price of policies.  Higher prices for policies will encourage more sellers.  This virtuous circle will drive the growth of the life settlement market.

Dan Young is President of Magna Life Settlements, one of the leading life settlement providers in the industry as measured by the face value of policies transacted.  Magna is wholly owned by Vida Capital and a member of the Life Insurance Settlement Association (LISA).

The Life Settlement Option: A Duty to Inform?

For the past two-and-a-half decades owners of life insurance policies who decide they no longer want or need those policies have had an alternative to surrendering those policies back to the issuing carrier – access to an organized and vibrant secondary market for life insurance, giving policy owners liquidity in a previously illiquid asset.  Surprisingly, unlike most originators of an asset for which there is a secondary market, life insurers have been slow to embrace this pro-consumer option.  In fact, the American Council of Life Insurers has actively opposed legislation creating an obligation for life insurance carriers to inform policy owners who have decided to lapse or surrender their policies that a life settlement might be an option.

The Life Settlement Option: A Duty to Inform?

The Life Settlement Option: A Duty to Inform?

The inevitable consequence of the ACLI’s and life insurance carriers’ position on voluntary disclosure is playing out in the recent lawsuit Larry Grill, et al. v. Lincoln National Life Insurance Co., filed in federal district court in California.  In this case, the owners of a life insurance policy brought suit alleging claims for fraudulent concealment, financial abuse of an elder and violation of California’s Unfair Competition Law, all stemming from the carrier’s failure to inform them of the existence and possibility of selling their policy into the secondary market for life insurance.

The plaintiffs purchased a policy from the defendant in 2004 with a face value of over $7,000,000; and, notwithstanding having paid hundreds of thousands of dollars in premiums, the investment returns on the policy became insufficient to cover the on-going cost of insurance charges.  The plaintiffs approached the defendant’s agent and were told their only options were to pay more premiums into the policy or undertake a partial surrender to decrease the cost of insurance.  The plaintiffs chose to surrender over $5,000,000 of the original face value of the policy.  When the plaintiffs learned that they might have been able to sell that $5,000,000 in coverage into the secondary market for life insurance, they filed suit.  The carrier filed a motion to dismiss for failure to state a claim upon which relief can be granted; that is, the carrier argued even if the plaintiffs’ claims were accepted as true, they were still entitled no relief.

On the basis of a technical analysis focused on the sufficiency of the claims pleaded by the plaintiffs, the court ultimately dismissed all of those claims; however, it did so with leave to amend to cure the deficiencies in the pleadings, and with a clear indication that the court believes that the plaintiffs’ claims are viable and can proceed once they were correctly presented.  For instance, the court stated that “the Court agrees that Plaintiffs have sufficiently alleged a duty to disclose based on partial representations by alleging that Defendant’s agent represented that they had two options and concealed the life settlement option”.  Further, the court concluded that the plaintiffs had sufficiently alleged a claim under California’s Unfair Competition Law on the basis of their claims that 1) elder citizens are unaware of the option of a life settlement; 2) that the defendant has a practice or policy of concealing the option from such citizens; and 3) that there is no utility or countervailing benefit to the defendant’s conduct.  Faced with these facts, the court concluded “[t]he Court agrees that there does not appear to be any utility to this alleged practice [failing to disclose the life settlement option], but the possible monetary harm to the insured and policy beneficiaries is clear.”

In sum, while this is one of the first lawsuits alleging that life insurers have an affirmative obligation to disclose the existence of the life settlements option, even in the absence of a legislative obligation to do so, it is unlikely to be the last.  For nearly 30 years the secondary market has offered consumers an option to realize additional value from their life insurance policies, it is time for life insurers to voluntarily embrace the secondary market before they are ordered to do so.

Originally published in Morris, Manning & Martin’s Insurance and Reinsurance Review Newsletter (Summer 2014)

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Why every senior has a right to know about life settlements

A popular narrative in mainstream news media coverage is that the lack of planning for individuals approaching retirement is pointing the way to a serious national problem. Health care and other costs are on the rise and a great many seniors are in a state of uncertainty about their finances. For many, a state of panic sets in when they realize their resources may not be enough to pay for the comfortable retirement years they once envisioned.

As one of the most overlooked assets in an individual’s investment portfolio, a life insurance policy is often not utilized to its full potential. Why? My experience over the past few decades in this business has shown me that it’s because individuals are unaware this asset creates liquidity options for them and, unfortunately, their professional advisors don’t understand all alternative uses for a life insurance policy. Many advisors, acting out of the best intentions, simply advise their clients to lapse or surrender the policy, roll it into a paid-up policy, or reduce the death benefit to save premiums.

But what about a life settlement?

Many seniors — and many of their financial and legal advisors, too — are not aware that a life insurance policy is personal property and may be sold as a life settlement for a value substantially greater than its cash surrender value. As a result, billions of dollars (face value) of policies that are no longer needed, wanted or affordable are lapsed and surrendered back to life insurance carriers by seniors who might have sold them for a cash payment. According to a Government Accountability Office (GAO) study on life settlements, the amount policyholders who settled their policies received was up to seven times that of the lapse or surrender value.  That represents hundreds of millions of dollars of value given back to insurance carriers.

Studies show that nearly 80 percent of baby boomers and seniors are interested in life settlements as a means to supplement retirement finances.

So, let’s talk about a senior’s right to know about their options with life insurance policies. Specifically, I believe they ought to have a right to know that there are options they should consider before lapsing their policy.  Six states — Kentucky, Maine, New Hampshire, Oregon, Washington and Wisconsin — have already passed various versions of a life insurance disclosure requirement, requiring insurance carriers to notify seniors in certain circumstances of the alternatives to lapse or surrender of their policy. These alternatives may include options such as the following:

Please visit the LifeHealthPro link below for the blog on its entirety: