Insurance Research Firm Forecasts Steady Growth in Life Settlement Market

One of the premier investment management and research firms serving the insurance industry has just released a new report on the state of the U.S. life settlement market, and their data forecasts a bright future for the asset class in the decade to come.

The Conning Report

Conning’s 18th annual life settlement review, “Life Settlements: Steady Growth Ahead,” examines the key forces fueling continued growth in the industry despite the current economic turbulence.

“Conning’s analysis of the factors driving life settlement growth are mostly positive,” said Roberta Lauria, an AVP of Insurance Research at Conning. “Consumers are likely to seek additional sources of income to offset economic pressures. Investor demand for alternative assets remains strong. Both factors are positive for life settlement growth.”

Conning has a long history of supporting institutional investors, including insurers and pension plans, with investment solutions, risk modeling software, and research related to the insurance industry. The firm was founded in 1912.

“Economic factors are favorable for continued growth as higher interest rates improve UL (universal life) crediting rates,” said Scott Hawkins, Head of Insurance Research at Conning. “In addition, the combination of inflation, equity market volatility, and potential recession may lead to greater life settlements as policy owners consider opportunities to reduce their costs or generate more income.”

Hawkins noted that, given the favorable nature of the drivers of life settlement market growth, Conning forecasts steady growth in both the annual face amount of new policies settled and the total size of the market for the period of 2023-2032.

Conning’s new life settlement industry research report is available for purchase from Conning by calling 888.707.1177 or going here.

Life Settlement Option

Each year, billions of dollars in face value of life insurance is lapsed by seniors over the age of 65, mostly from a lack of knowledge that an unwanted policy may be sold. There are numerous reasons to consider selling a life policy — rather than allowing it to lapse or be surrendered — such as the premiums becoming too expensive, a sudden need for resources to pay for health expenses and long-term care, or simply a desire for funds to improve a retirement lifestyle.

As more seniors and their trusted advisors become aware of this alternative to the lapse or surrender of a life insurance policy, they are interested in learning more about how to sell their life insurance policies each year through life settlement transactions.

The U.S. life settlements industry offers these seniors a potential solution to their immediate cash needs with a simple transaction that is safe, ethical, and well-regulated. They can quickly obtain a no-obligation, fair market appraisal of their life insurance policies and then compare that option to the cash surrender value offered by the insurance company.

How Advisors Can Help!

Financial advisors play a key role in helping their clients identify sources of cash flow as well as possible areas where they can reduce their discretionary expenses. The life settlement option may be attractive for specific clients who no longer need or can afford their life insurance policies. In these cases, a life settlement transaction can achieve both fiscal disciplines: reduce expenses (by eliminating annual premiums) and raise cash (by selling a life insurance policy for immediate payment) at the same time.

As the year draws to a close, this is an excellent time to review your existing client roster and take a close look at all of the life insurance policies owned by your senior clients. If you have any clients over the age of 65 who own policies with death benefits greater than $100,000, you may want to touch base with them and see how their families are faring with their retirement funding needs.

If you identify a client who has a need for liquidity — or simply no longer wants to keep their life insurance policy — don’t let them surrender that policy back to the carrier simply because it’s an easy option. Educate them about the life settlement option, and if they are interested, reach out to us so we can provide a free, no-obligation appraisal of their policy.

For the right client and the right circumstances, a life settlement can be a tremendous vehicle for generating immediate cash and eliminating an annual expense. It can also benefit your financial advisory firm by producing an industry-standard referral fee if a client you refer to a life settlement broker is able to arrange for the sale of their policy.

Rising consumer and investor demand for life settlements over the next decade signals a robust market for life settlement transactions. Make sure that you are serving your client’s best interests by evaluating whether any of them may be good candidates for participating in this safe, ethical, and well-regulated secondary market for life insurance.

The only way to make sure that you or your client are obtaining the maximum value for a life insurance policy is to work with an experienced life settlement broker who has a fiduciary duty to represent the consumer’s best interests. For more information, please visit www.welcomefunds.com or call 877.227.4484.