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 BizBuySell.com, small business sales in 2013 were up by 42 percent from the previous year.