Viatical Settlements New Investments for Wall Street?

ticker_shuffle · 11-03-2009, 11:08 PM

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 · 11-03-2009, 11:29 PM

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 · 11-03-2009, 11:53 PM

Originally Posted by 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.

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 · 11-04-2009, 05:02 PM

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 · 11-04-2009, 10:27 PM

Originally Posted by 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

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.

al3 · 11-04-2009, 10:42 PM

Originally Posted by Death Cab For Tootie

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 · 11-04-2009, 11:23 PM

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 · 11-04-2009, 11:57 PM

Originally Posted by al3

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.

al3 · 11-05-2009, 12:54 AM

Originally Posted by Death Cab For Tootie

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 · 11-05-2009, 07:52 AM

Originally Posted by Death Cab For Tootie

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

Impossible!

ticker_shuffle · 11-05-2009, 07:57 AM

I don't think originating a new policy for the soul purpose of selling for a viatical settlement would be very feasible unless the underwriter was oblivious. You would have to assume a terminally or cronically ill patient would qualify for any type of insurance.

I think the likes of Goldman Sachs and JP Morgan better find another way to make money. Like how about actually lending to small business.

Death Cab For Tootie · 11-05-2009, 07:59 AM

Originally Posted by al3

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!

As absurd as automatically assuming someone's political or ethical motives? Or as absurd as not admitting when they're wrong?

al3 · 11-05-2009, 10:49 AM

Originally Posted by Death Cab For Tootie

As absurd as automatically assuming someone's political or ethical motives? Or as absurd as not admitting when they're wrong?

If you post behind a cloak we're going to assume anything we want about you... absurd or not.

Some will assume you are a really good human being. Some will assume you are a terrorist. It is up to them and there isn't anything you can say under your sheet and hood that is going to convince some people one way or the other.

You want it both ways. You want to kick ass but not have to take any responsibility for it. You want to figuratively burn a cross here and have no one know who you are.

Nope. Doesn't work that way. Yes, you can kick ass (as you have) but since you post from the darkness the rest of us are justified in ascribing any attributes (good or bad) to you that we want.

You don't like that? Then identify yourself. Otherwise you get treated like anyone walking around in a ski-mask... an Olympic down-hill racer to some.. or just another arch-conservative looking to burn a cross somewhere to others. Our choice... not yours.

If you are a really good guy... I haven't see any evidence of it. I think you are (or are going to be) just another of the 12,000 or so self-centered neo-cons that this board attracts in droves. Others may differ in that analysis... and, as always, YMMV.

Some people assume the best of those who post from the shadows. I'm conditioned to assume the very worst... especially toward someone who uses "death" in their screen-name. Yes, I'd be watching my back around you.

Are you carrying concealed today? I wouldn't doubt it... but I hope you will identify yourself so that there will be no doubt that you are a stand-up guy.... or whatever.

I'm almost universally hated here (by the vast majority of the a-cons and n-cons... especially those who carry concealed weaponry... whom I would never turn my back on) but at least they know who I am and that I take responsibility for what I say by making it easy for them to identify me.

Don't worry. You are in good company here.

When you're an A-Con,
You're a Con all the way
From your first asshole post
To your last posting' day.

When you're a Con,
If the libs hits the fan,
You got a-cons around,
You're a family man!

You're never alone,
You're never disconnected!
You're home with your own:
When liberals expected,
You're "concealed" protected!

Then you are set
With a capital A,
Which you'll never forget
Till they cart you away.
When you're a Con,
You stay a Con!

-- with apologies to a great liberal... Leonard Bernstein

YouTube - West Side Story-Jet Song

Al(3)
InsuranceSolutions123 Agency

JMO Fan · 11-05-2009, 10:53 AM

STOLI and settlements seem to count on life insurance tax incentives. COLI and BOLI business also capitalize on tax-deferred cash value growth. None seem focused on the original reason for those tax advantages (i.e., death benefits for beneficiary widow(er)s and orphans).

All of these could jeopardize the tax status of death benefits as well as cash values.

Death Cab For Tootie · 11-05-2009, 11:19 AM

Originally Posted by al3

If you post behind a cloak we're going to assume anything we want about you... absurd or not.

I 'post behind a cloak' because I am affiliated with a B/D. Because of this, I have to have to be somewhat anonymous.

Some will assume you are a really good human being. Some will assume you are a terrorist. It is up to them and there isn't anything you can say under your sheet and hood that is going to convince some people one way or the other.

I agree with this, and no matter what I say or do, people will have preconceived notions of me.

You want it both ways. You want to kick ass but not have to take any responsibility for it. You want to figuratively burn a cross here and have no one know who you are.

Your use of the phrases 'cloak and hood' and 'burn a cross' are very interesting. Are you implying I am a racist? Are you implying I am a member of the KKK? For shame.

Nope. Doesn't work that way. Yes, you can kick ass (as you have) but since you post from the darkness the rest of us are justified in ascribing any attributes (good or bad) to you that we want.

I can live with that. I can only be who I am

You don't like that? Then identify yourself. Otherwise you get treated like anyone walking around in a ski-mask... an Olympic down-hill racer to some.. or just another arch-conservative looking to burn a cross somewhere to others. Our choice... not yours.

Again with the racism implications. Please point out where I have even mentioned race in any of my posts.

If you are a really good guy... I haven't see any evidence of it. I think you are (or are going to be) just another of the 12,000 or so self-centered neo-cons that this board attracts in droves. Others may differ in that analysis... and, as always, YMMV.

A-HA! You think "I am going to be" another of the self-centered neo-cons? In other words, you don't know, do you?

Some people assume the best of those who post from the shadows. I'm conditioned to assume the very worst... especially toward someone who uses "death" in their screen-name. Yes, I'd be watching my back around you.

My screen name, Death Cab for Tootie, is a play on words. It references a band, Death Cab for CUTIE. I'm sorry if I implied otherwise. God forbid I offend your fragile sensibilities....

Are you carrying concealed today? I wouldn't doubt it... but I hope you will identify yourself so that there will be no doubt that you are a stand-up guy.... or whatever.

Again, don't carry and cannot/will not give up my anonyminity.

I'm almost universally hated here (by the vast majority of the a-cons and n-cons... especially those who carry concealed weaponry... whom I would never turn my back on) but at least they know who I am and that I take responsibility for what I say by making it easy for them to identify me.

My guess is you're universally hated around here because you're an insufferable malcontent. If you're not, please prove otherwise. Nobody asked you to comment in this thread, especially with an ad hominem attack on me that detracted from the topic at hand. Feel free to continue to attack me, unprovoked. I'm a big boy, I can handle it.

Don't worry. You are in good company here.

When you're an A-Con,
You're a Con all the way
From your first asshole post
To your last posting' day.

When you're a Con,
If the libs hits the fan,
You got a-cons around,
You're a family man!

You're never alone,
You're never disconnected!
You're home with your own:
When liberals expected,
You're "concealed" protected!

Then you are set
With a capital A,
Which you'll never forget
Till they cart you away.
When you're a Con,
You stay a Con!

-- with apologies to a great liberal... Leonard Bernstein

YouTube - West Side Story-Jet Song

Al(3)
InsuranceSolutions123 Agency

I look forward to your response.
- - - - - - - - - - - - - - - - - -

Originally Posted by JMO Fan

STOLI and settlements seem to count on life insurance tax incentives. COLI and BOLI business also capitalize on tax-deferred cash value growth. None seem focused on the original reason for those tax advantages (i.e., death benefits for beneficiary widow(er)s and orphans).

All of these could jeopardize the tax status of death benefits as well as cash values.

COLI and BOLI use tax-free death benefits to replace a loss. Just because it's not a widower or orphan child doesn't make it any less legitamate.

al3 · 11-05-2009, 02:06 PM

Originally Posted by Death Cab For Tootie

you're an insufferable asshole

I've asked the list-owner to delete your posting because of a direct ad hominem attack. We are not allowed to do pejorative "name calling" in the venue anymore.

I suggest you either edit your post, or see it deleted. Your choice.

Of course, if you believe that I have defamed you, you should also take it up with the list owner.

Fair and balanced.

Al

WinoBlues · 11-05-2009, 02:17 PM

What a baby!

Death Cab For Tootie · 11-05-2009, 02:32 PM

Originally Posted by al3

I've asked the list-owner to delete your posting because of a direct ad hominem attack. We are not allowed to do pejorative "name calling" in the venue anymore.

I suggest you either edit your post, or see it deleted. Your choice.

Of course, if you believe that I have defamed you, you should also take it up with the list owner.

Fair and balanced.

Al

Fair enough. I will change the offending term I referred to you as. I should know better than to stoop to your level. I will not, however, report your post, disagreeable as it may be. You see, I have my big boy pants on. Always. If I am called to the mat, I am willing to defend myself without having to appeal to the nanny state. You, however, feel the need to appeal to someone else because *gasp* someone called you out for being combatative and assumptive.

Grow a set or quit your complaining and stay out of battles you have no business being in.