Statistics reported at the fall Life Insurance Settlement Association meeting continue to demonstrate how many seniors are failing to take advantage of the life settlement opportunity. The Deal and Conning Research recently estimated that between $2.1 and $2.2 billion in face amount were transacted as life settlements in 2016. The Deal also reported that this represented 1,650 policies.
Although those statistics indicate growth in the life settlement market, contrast them with number of policies that were lapsed or surrendered by seniors. Based on the 2008 Society of Actuaries/LIMRA persistency study, it is estimated that more than 480,000 policies totaling over $30 billion in face amount, insuring seniors over age 75, are lapsed in a single year alone! For age 70 and above, the numbers become even more staggering: 710,000 policies and $57 billion in face amount!
Based on the lack of submissions, this data makes it abundantly clear that producers are letting down their senior clients by failing to offer them the opportunity to sell a policy in a life settlement that is about to be lapsed or surrendered.
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But just as nature abhors a vacuum, others are filling in the void being left by insurance producers who underserve their clients. Increasingly, providers, the companies that represent life settlement investors, are cutting out the producer and going direct to clients by doing client-focused advertising in both print and electronic media.