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Betty's Corner


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Insurance Companies to Notify Lapsing Policyholders About Life Settlements

www.businesswire.com

Boomers and seniors will soon have increased access to a novel way to help fund retirement. In a move that will have a sweeping effect on the life insurance industry, a respected national group of insurance legislators has recommended that insurance companies must now notify life insurance policyholders of their financial options if they choose to let a policy lapse. Life insurers will be responsible for informing customers about such options as life insurance settlements and accelerated death benefits, according to a model act recently passed by the National Conference of Insurance Legislators. State insurance laws typically follow the recommendations of NCOIL, and consumers can expect that insurance companies will be disclosing the information soon.

"This represents a huge victory for consumers and a major validation for the life settlement industry," said Wm. Scott Page, president and CEO of The Lifeline Program, a leading life insurance settlement provider based in Atlanta. "The life insurance industry has fought for years to protect its financial interests to the detriment of consumers, and legislators have finally taken proper action."

The model act requires insurers to notify people who are 60 or older, or who are chronically ill, of alternatives to lapsing or surrendering their policies, including such options as accelerated death benefits and life settlements.

A life settlement is the sale of an existing life insurance policy, by an elderly policyholder, for more than the current cash surrender value. A settlement is a unique alternative to surrendering a policy or letting it lapse and can be offered on term, whole or universal life policies. Money from a settlement can be used to pay for any expense, from paying for a grandchild's education to funding a long-term care insurance policy.

"This new regulation will immediately assist the thousands of seniors who would otherwise allow life insurance policies to lapse without knowing all of their options," said Page. "And it opens the door to a new and innovative way to help fund retirement."

It has been predicted that 2011 will mark the year that the largest number of baby boomers face retirement. This group is actively looking for new financial options, and life settlements will play a key part in future retirement planning.

The Lifeline Program is a life settlement provider based in Atlanta, Ga., and is a division of Wm. Page and Associates, Inc. Founded in 1989, the company assists seniors with retirement planning options and actively partners with insurance agencies and broker dealers to establish life settlement business lines. For more information on life settlements, contact Stephen Terrell of The Lifeline Program at 770-724-7300 or visit www.thelifeline.com.


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