Life settlement scrutiny increases

There’s a lot of action in the life settlement world these days, some good and some bad. A class-action lawsuit against American Equity Investment Life Insurance Co. resulted in over $16 million in damages awarded to seniors across the country. As many as 24,000 seniors who purchased deferred annuities were rewarded in the settlement.

The suit was initially filed in 2001 and covers the period from 1997 to 2007, when, according to the suit, American Equity and a Dallas-based legal and insurance marketing firm participated in a living trust mill. Insurance agents encouraged elderly couples to buy a living trust, then, posing as representatives of the law firm, Advanced Legal Marketing Services and Addison Insurance Marketing, persuaded the victims to sell those trusts for deferred annuities.