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Insurers Push For Tighter Resale Rules
If you want to sell your life insurance, you may have to hurry.
Wealthy people and retirees who don’t feel they need life insurance anymore were historically able to sell their policies, usually for a premium. But that might change as a fight brews between a growing secondary market and the insurers.
The secondary market — known as life settlements — is coming under fire from the life insurance industry.
Life settlement companies buy policies that build up a cash value, such as universal life policies.
Sometimes they buy convertible term-life policies. Or, if the policyholder’s life expectancy is short, they may buy regular term-life policies.
The idea is to offer the policyholder more than they would get in cash surrender value (as in universal life policies) or some portion of the face value (in term life).
Life settlements have been around in various forms for centuries. But recently they’ve grown enough to raise the ire of life insurers.
December 1st, 2007 at 12:42 pm
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