Today, many seniors are using the proceeds from a Life Settlement to
finance senior housing and long-term care needs, as well as funding the redemption for a business's founding partner Equity
Ownership/Partnership Agreement.
The Challenges
- Seniors opting to join CCRC's without walls may well need to monetize/liquidate a sizable asset to fund their initial
"buy-in" as well as ongoing monthly charges as they are not selling their primary residence to fund the membership
fee or ongoing fees
- Many seniors with life insurance policies that they
no longer need, or that are re-pricing and can no longer afford often lack awareness that
they can sell a life insurance policy in the secondary market for an immediate cash settlement.
The Opportunities
- The demand for senior housing
and health care facilities is expected to increase with the aging baby boom population.
- As aging seniors explore their options for affordable housing and long-term care, administrators have an opportunity
to educate current and prospective residents about life settlements as a financial resource to help
finance their housing and medical care needs.
Education is Key
- At Moore Financial Services we specialize in addressing the business challenges for today's senior
housing and health care organizations.
- We put our financial and insurance expertise to work
for you through consultation, innovation, and collaboration
- We welcome the opportunity to visit
with you and other key members of your organization to explain the secondary market for life insurance and how it could impact
your occupancy levels.
Outreach to Senior Consumers
Moore Financial Services is available to assist your organization in educating current and
prospective residents about the benefits of a life settlement for policies they no longer need or can afford.
If soft occupancy levels have challenged your facility's bottom line and growth strategies. Contact us today. Life
Settlements could be one of the solutions you are seeking.
The Facts About Life Settlements
A life settlement is
the sale of a life insurance policy to an institutional funder for an amount that is typically 3 to 5 times greater than the
policy's cash surrender value.
Why Do Seniors Sell Their Policies?
- Policy no longer needed for estate planning.
- Retired business owner, key man policy
obsolete
- Premium payments have become too expensive
- Money is needed
for retirement lifestyle
- Funds needed for medical or long-term care
Are Life Settlements Regulated?
Yes 42 of 50 states now regulate life
settlements. Brokers who handle life settlement transactions are required to be licensed in the state from which they operate
as well as be licensed in the state in which the policy owner resides.
What Types
of Policies Qualify?
Most policies in the secondary market are permanent life insurance
policies. Such as
- Universal Life (UL)
- Joint Survivorship
Universal Life (SUL)
- Term Policies Still Convertible
What are the Qualification Factors
Most policies sold in the secondary
market involve seniors (typically 75 and older) who have an estimated life expectancy of 12 years or less. However
each set of circumstances need to be evaluated as underwriting parameters have recently changed to younger insureds with longer
life expectancies.
A Typical Life Settlement Transaction
The average life settlement transaction involves a life insurance policy with a face value of $1 million to $3 million for
a senior 78 years or older. It is not uncommon for a senior with a $1 million policy to receive a cash settlement for $250,000
to $300,000-the average entry fee for a CCRC facility, or membership fee for CCRC without walls.
