The recent economic crisis has increased the interest in “life settlements,” wherein life insurance policy holders sell their policies to third party investors. Policy sellers (usually wealthy and elderly or chronically/terminally ill) can realize a return in amounts greater than the cash surrender value but less than the face value. Investors hope to profit at the death of the former policy owner after paying transaction costs and something less than the face value of the policy.
All aspects of life settlement transactions have recently come under SEC scrutiny, particularly the securitization of settled policies. The faculty panel will describe the structure of life settlements, applicable state regulation, tax treatment, recent experiences in securitization, and the concerns raised by the SEC.
What You Will Learn
Familiarize yourself with “stranger-owned life insurance” as an investment opportunity.
Learn how state and federal regulations impact purchase of settled life insurance policies.
Understand SEC concerns regarding life settlements.
Total 60-minute hours of instruction: 1.5 Total 50-minute hours 1.8
Suggested Prerequisite: Limited experience in subject matter
Educational Objective: Acquisition of knowledge and skills to develop proficiency as a practitioner; maintenance of professional competence as a practitioner; provision of information on recent legal developments