Seniors warned about life settlements

Given NASD’s alert, it now makes sense for advisors and settlement brokers to make sure they’re in compliance with the appropriate regulator – NASD for variable life products and state insurance departments for non-variable products. The Life Settlement Association has compiled a list of states that require settlement and viatical licenses (www.lisassociation.org/public/compliance/index.html).

NASD’s investor alert urged consumers to consider five factors before proceeding with a settlement:

1. The impact of the transaction on their ability to buy additional life insurance, should the need arise later.
2. Whether or not the settlement provider is offering a fair price.
3. Whether commissions paid to the life settlement broker and other financial professionals are reasonable.
4. The transaction’s effect on other areas of the person’s finances (eg., taxes, Medicaid eligibility).
5. Whether personal data will be kept confidential during the transaction.