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Two-thirds of small biz owners plan to retire within 10 years

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New research from Asset Life Settlements points to an increase in the supply of corporate-owned life insurance (COLI) policies brokered in the secondary market due to business owners seeking to cash out and retire.

“The improving economy and financial performance of small businesses is the driving force behind the recent spike in the sale of small businesses by aging owners,” says Scott Thomas, co-founder of the company. “Economists estimate that 70 percent of the 12 million privately owned businesses in the U.S. will change hands as baby boomers retire in the next decade. Some of those retiring business owners who carry key person life insurance may qualify for a life settlement to boost their retirement nest egg.”

Company co-founder Jeff Hallman cited discussions with agents and recent market studies to support the company’s optimistic outlook.  According to, small business sales in 2013 were up by 42 percent from the previous year. 

Data released in May 2014 by Pepperdine University found that 65 percent of the businesses sold in Q1 2014 were by baby boomers. And a 2013 Pepperdine survey found that 67 percent of business owners expect to retire within the next 10 years.

“It makes sense that aging business owners who survived the recent economic downturn are motivated to cash out now,” says Hallman. “Insurance advisors should remind retiring business owners and business brokers not to overlook the possible hidden asset value of key person life insurance.” 

Hallman and Thomas note that the recent upturn in mergers and acquisitions and the projected sale of businesses present new opportunities for insurance advisors as it relates to the disposition of corporate owned life insurance. 


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