Insurance Settlement Eec Blasts Study

A founding member of the life insurance settlement business criticized a recent study finding life insurance settlements are costly for policyholders.[@@]

William Scott Page, head of Wm. Page & Associates Inc., Atlanta, one of the founders of the life insurance settlement industry, says the study, underwritten by Massachusetts Mutual Life Insurance Company, Springfield, Mass., was biased and exaggerated.

Life insurance settlements enable individuals, typically seniors who have become disabled or seriously ill, to sell existing life insurance policies for sums that exceed their cash surrender values.

MassMutual and other insurers commissioned Deloitte Consulting and the University of Connecticut to analyze life insurance settlements.

Their analysis concluded life settlement transaction costs such as commissions, marketing, overhead and profit typically amount to 50% to 67% of the policies’ intrinsic economic value. The study also concluded “the policyholder with impaired health could maximize her estate value if other assets are liquidated and the life insurance policy is maintained until death.”