Viatical Settlements New Investments for Wall Street?

[ticker_shuffle]

You guys see article in New York Times about how, "Wall Street Pursues Profit in Bundles of Life Insurance?"

Frankly i don't see it working. Not enough people willing to take 40 cents on the dollar, i would hope.

(I would post link, but might not be appropriate. I put on life thread unable to find another closer related option.)

 

[dgoldenz]

Most life settlements are nowhere close to 40 cents on the dollar. Usually 1-20% of face value depending on a number of factors. The investment side of life settlements strongly hinges on the life expectancy evaluations being correct. There is going to be a lot more regulation and tax law changes regarding life settlements in the near future. I believe there has already been talk about life settlement policies losing their tax-exempt status.

 

[ticker_shuffle]

Most life settlements are nowhere close to 40 cents on the dollar. Usually 1-20% of face value depending on a number of factors. The investment side of life settlements strongly hinges on the life expectancy evaluations being correct. There is going to be a lot more regulation and tax law changes regarding life settlements in the near future. I believe there has already been talk about life settlement policies losing their tax-exempt status.

They lose their tax exempt quality in the settlement process from what I understand. Once the policy is exchanged for property, cash included, it is no longer tax exempt. Which is fair.

 

[Full Throttle]

I see the need the life settlements meet, bailing policy holders out of policies they can no longer afford and would just lapse anyway. However, it only raises prices for the rest of the public by throwing off the insurers' lapse ratios. Taking out a life policy just for the purpose of selling it should lose its tax exempt status, that is a no brainer and goes against the purpose of life insurance and the reason for the tax exemption

 

[Death Cab For Tootie]

I see the need the life settlements meet, bailing policy holders out of policies they can no longer afford and would just lapse anyway. However, it only raises prices for the rest of the public by throwing off the insurers' lapse ratios. Taking out a life policy just for the purpose of selling it should lose its tax exempt status, that is a no brainer and goes against the purpose of life insurance and the reason for the tax exemption

Not taking into account the concept of insurable interest, this is the single most important reason we as agents should not be taking part in settlements. When lapse ratios go pear-shaped for insurance companies, cost for insurance goes up, dividends get cut, and comprimises the strength of insurance companies. In a nutshell, unintended consequences make settlements, which could be considered good for the public, is much, much worse than it seems.

 

[Guest]

Not taking into account the concept of insurable interest, this is the single most important reason we as agents should not be taking part in settlements. When lapse ratios go pear-shaped for insurance companies, cost for insurance goes up, dividends get cut, and comprimises the strength of insurance companies. In a nutshell, unintended consequences make settlements, which could be considered good for the public, is much, much worse than it seems.

Wait a minute. Am I hearing a neo/arch conservative suggest that a transaction that is legal and ethical and which has financial benefit to free, legal, citizens of the USA... be banned?

I thought that a-cons and n-cons are always for the rights of the individual. But you want to put the rights of the insurance carriers over the rights of the individual? Is that a switch or what?

A political philosophy that holds that all government regulation and intervention in the free market is BAD... how is it that you are against life settlements?

I know the answer. Do you?

Al

 

[Robert Barney]

I think the folks who are hot on viatical settlment investments are betting that Obama gets his death panels in the takeover of healthcare by the government.

 

[Death Cab For Tootie]

Wait a minute. Am I hearing a neo/arch conservative suggest that a transaction that is legal and ethical and which has financial benefit to free, legal, citizens of the USA... be banned?

I thought that a-cons and n-cons are always for the rights of the individual. But you want to put the rights of the insurance carriers over the rights of the individual? Is that a switch or what?

A political philosophy that holds that all government regulation and intervention in the free market is BAD... how is it that you are against life settlements?

I know the answer. Do you?

Al

This has nothing to do with the rights of insurance carriers. This has everything to do with my clients and future clients. I don't want them to have to pay higher premiums. I want them to insure themselves with very strong insurance companies. I want my livelyhood to not be affected adversely, so I can service my clients to the best of my ability.

And for the record, you have no idea who I am or what I stand for. However, feel free to make further assumptions, thus making you look more like a horse's ass.

 

[Guest]

And for the record, you have no idea who I am or what I stand for. However, feel free to make further assumptions, thus making you look more like a horse's ass.

Well... true. But if you post from behind a cloak, as you and others do, those who don't are allowed (by long-standing internet tradition) to make any judgement we wish about you.

One more thing. I don't know for sure, but I think that someone named "Death Cab for Tootie" calling ANYONE a horse's ass is just a bit absurd!

 

[Ron Van D]

thus making you look more like a horse's ass.

Impossible!