A CASE STUDY: TERM TO PERM — CREATING
SIGNIFICANT PROFIT FROM A SEEMINGLY WORTHLESS POLICY

Recently, Lifeline has noticed a particular trend growing more and more popular among our policy sources: converting older term policies to permanent life insurance, and the settlement of those new permanent life insurance policies for a significant (and unexpected!) profit to the client.

In this hypothetical case, a policy source (for this scenario, a life insurance agent) had a client that had purchased a term policy from him 15 years ago. When evaluating the client's insurance portfolio, the agent noticed the term policy was on the verge of expiring. The agent recognized that the client no longer needed the policy, and suggested they look into converting the policy and then sell the policy for a life settlement.

As the example demonstrates, periodic and thorough review of your clients' life insurance portfolios can ultimately yield hundreds of thousands, or even millions, of dollars for your client. In this case, the client netted $2 million dollars for a policy that was soon to be worth nothing. The agent also benefited, receiving commission payments for both converting the policy and completing the life settlement. By providing another option for the client and creating new wealth, this case demonstrates a great example of how life settlements truly are a key piece of the financial planning puzzle.

Currently, many life settlement advocates oppose California Senate Bill 1224 yet would favor that legislation if a changed in a number of ways, including:

Conversely, numerous life insurance trade groups favor the bill but would like to see it further strengthened. The California Senate Banking, Finance & Insurance Committee recently voted 7-1 in favor of the initiative as drafted but also vowed to make adjustments in order to craft legislation that allows for a legitimate life settlement market while eliminating STOLI and protecting the insurance industry.

It will take some time before we have a sense of what the future of life settlements will look like in California, but there clearly is reason to be both optimistic and concerned. We will continue to provide details as they become available.

What makes this LISA event so unique is the sheer size of the meeting and the diversity of the opportunities it offers, where you not only can meet many industry participants, but can also attend a wide variety of discussion panels, research and development presentations, and guest speaker sessions focused on topics ranging from STOLI and taxation to future trends and the insurance industry's perspectives on life settlements.

As always, we will be there and encourage everyone interested in life settlements to join us. We'll see you there!

One year ago, I came on board with The Lifeline Program as the office manager, and it has proven to be a great fit for me. As part of my day-to-day job duties, I have the opportunity to work with all departments within the company. My primary responsibilities include opening up the office, monitoring office supplies so that they are stocked and available to all employees, and generally making sure everything is in order for a productive working environment.

My previous experience in client relations for a corrugated materials company has helped me in my role at The Lifeline Program. It enables me to relate to, and work with, many types of people and all the various requests I encounter daily.

What I enjoy most about working with the company is the ability to truly multi-task and be involved in many different projects, and see them all through to completion. And I also love the fact that I get to work with such a well-rounded group of people!