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June 29, 2022 at 04:05 PM
What You Need to Know
- LISA reports that owners completed about 3,000 sales of in-force policies last year.
- The transactions generated $750 million in payments.
- The total cash surrender value of those policies was $96 million.
The Life Insurance Settlement Association recently released 2021 industry data compiled from LISA provider members, which represent about 95% of the entire industry.
The LISA numbers show a healthy and growing industry that has supplied, over the years, billions of dollars to policy owners in excess of what they would have received had they lapsed or surrendered their policy.
Are your clients benefiting from the secondary market for their policies?
The Data
In 2021, more than 3,000 life settlements were transacted.
As a result of these sales, more than $750 million, or about $250,000 per policy, was paid to consumers by life settlement buyers.
Had those policies been surrendered to insurers for their cash surrender value, the policy owners would have received only $96 million.
So, the life settlement industry added more that $650 million dollars to the pockets of policy owners.
The total face amount of those 3,000 policies exceeded $4 billion with an average policy face amount of about $1.33 million dollars.
The Surrender Problem
These sales represent just a tiny fraction of the 9 million plus policies and $642 billion in face amount that are lapsed or surrendered each year by life insurance policy owners.
Robin S. Weinberger, CLU, ChFC, CLTC, is the director of national accounts for Life Insurance Settlements Inc. She has been a general agent and director of national accounts for Connecticut Mutual and vice president of marketing for Sun Life of Canada. She can be reached at 