The rising number of seniors in the U.S. who are financially unprepared for retirement may find a life settlement transaction to be an attractive option for generating retirement income, according to keynote speakers at the Life Insurance Settlement Association (LISA) 24th Annual Fall Life Settlement & Compliance Conference in Orlando.
In a life settlement transaction, the owner of a life insurance policy transfers ownership of their policy to a third-party buyer in exchange for an immediate cash payment. The buyer of the policy pays all future premium payments and receives the policy benefit upon the death of the insured.
LISA’s Fall Conference, the longest-running professional conference in the life settlement industry, was held Oct. 21-23 at Disney’s BoardWalk Inn, in Orlando, Fla. The first keynote address was delivered by Bob MacDonald, the founder of LifeUSA Insurance and the former CEO of Allianz Life. Drawing on his decades of experience in the life insurance industry, MacDonald encouraged industry participants to “reminisce about the future” by visualizing where they want to go, then communicate that vision with employees and business partners who can help make it possible for them to achieve those goals.
“The life settlement industry has the potential to reach a larger audience of consumers in the years ahead and one way to perhaps achieve that is to focus on how life settlements can be a source of retirement income,” MacDonald said.
The second keynote address was presented by Dan Veto, senior advisor at Age Wave, a leading consulting firm that specializes in understanding the aging population. Veto spoke to attendees about how the “age wave” of baby boomers will transform the way we think about, plan for and live out retirement in America. He noted that “two-thirds of the people in the history of the world who have attained the age of 65 are alive today.”
“There are a number of powerful forces that are reshaping retirement in America, including the growing gap between the average life expectancy and the average retirement age,” said Veto. “These social and economic trends create rising opportunities for life settlements as an option for some seniors who may benefit from an ‘equity release’ of a life insurance policy. This may be an option for them to generate income to help fund their retirements.”
In a featured session moderated by Scott Harris (chief marketing officer of Magna Life Settlements), guest speaker John Mitchell, CPA, shared a number of practical insights about how to better connect with seniors who may be interested in the life settlement option. Mitchell founded Reverse Mortgage USA, a company that grew to become the fourth-largest reverse mortgage lender in the U.S. before its acquisition. He explained a number of key learnings from his success working with seniors and possible applications to the life settlement business, such as the importance of educating seniors about their options — “no hype, just straight talk,” he advised — and always looking out for the best interests of the customer.
Other highlights from the conference included:
- A presentation from Richard Whitbeck, chairman of Atlantic Brokerage, who discussed the evolution of how the life settlement industry interacts with financial advisors and outlined a number of emerging scenarios in which life settlement transactions may be attractive options for seniors.
- A panel discussion featuring Brian Casey (partner at Locke Lord LLP), Matthew Sheridan (investment management consultant to QuantRes) and John McFarland (CEO of NorthStar Life Services, LLC), which unpacked the exciting new technologies of Blockchain, Artificial Intelligence and Robotic Process Automation, each of which offers the potential for tremendous efficiency gains in life settlement transactions.
- A panel discussion moderated by Sherry Duarte (president of SLG Life Settlements) — with featured experts Jule Rousseau (partner at Arent Fox), Jolene Fullerton (attorney at Law Office of Jolene Fullerton) and Joey McCray (vice president of Magna Life Settlements) — that provided a comprehensive guide to conducting thorough due diligence at various stages of the closing process.
- A detailed presentation delivered by Steven Sklaver, partner at Susman Godfrey LLP, regarding recent developments in the controversial “Cost of Insurance” litigation, what the next steps are likely to be in these key cases and what it means for the life settlement marketplace.
- A panel update — featuring Thomas Weinberger, partner at Schulte Roth & Zabel LLP, and Thomas Sherman, of counsel at Locke Lord LLP — regarding changes to the reporting requirements from the Internal Revenue Service as a result of the 2017 Tax Cuts and Jobs Act.
“As more seniors become aware of the fact that their life insurance policies could be assets they can sell to generate immediate cash, the life settlement industry will continue to enjoy steady growth as an alternative to lapsing or surrendering a life insurance policy,” said Darwin M. Bayston, CFA, president and chief executive officer of LISA. “The guest speakers and industry experts at this year’s conference shared important insights that provided attendees with deeper visibility into how they can take advantage of these attractive market conditions for the benefit of their businesses and investors as well.”
For more information about LISA’s industry-leading professional conferences, please go to www.lisa.org/events.
About the Life Insurance Settlement Association: The Life Insurance Settlement Association (LISA) is the nation’s oldest and largest organization representing participants in the life settlement Industry, with a current membership of more than 90 companies doing business in all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands. The mission of LISA is to promote the development, integrity and reputation of the life settlement industry, to advance the highest standards of practice and professional development for the industry, and to educate consumers and advisors about a life settlement as an alternative to lapse or surrender of a life insurance policy. For more information, visit www.lisa.org.
