Page 10 - The Lifeline Program White Paper

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What makes term-to-perm so interesting and
attractive is that one can turn a non-
performing asset into a moneymaker with very
little downside. Life settlement providers work
with agents to convert policies and purchase
them to include in life settlement portfolios.
Most, though not all, term policies are
convertible. Agents typically advise term
insurance buyers to pay a slightly higher
premium so that a policy can be converted in
the future. This is normally suggested because
agents want to make sure that their clients
remain insurable. If a term policyholder gets
sick and is not eligible for a new, permanent
policy, then converting that term policy might
be the only option for the policyholder to keep
coverage. However, not every conversion is
exercised, so there are a large number of
convertible term policies in force, and many
are due to expire in the next few years. A
term-to-perm conversion could be a great
windfall for the policyholder.
Because term insurance is less expensive
than permanent insurance, the policyholder