Could it be that the very nature of the life settlement market is about to change? At the very least, a lot more consumers than ever before could soon become aware of the settlement option.
At the recent annual meeting of the National Conference of Insurance Legislators (NCOIL), members of the group approved the Life Insurance Consumer Disclosure Model Act, based on a 2010 Kentucky law and sponsored by Kentucky state Rep. Ron Crimm.
Essentially, the model deals with one of the biggest challenges insurance agents face when approaching the topic of life settlements: that they are prohibited, either by a carrier or a broker-dealer, from engaging in such a transaction with clients. And of agents who don’t expect to be involved in a life settlement transaction, 23 percent say it’s because they’re prohibited, according to the 2010 Agent Media Life Settlement Market Study.
The model would require that life insurance carriers notify clients of their options if they are having trouble paying their life insurance premium. In addition to such common alternatives as accelerated death benefits and conversion to long term care, selling the policy benefits to a life settlement company is among the eight options listed in the model. Policyholders would also receive warning that not all options may be available, and urges them to contact a financial advisor, insurance agent, broker, or attorney for more information.