Why Life Settlements are Cash benefits?



It will be a while before the memory of bad real estate deals and overblown derivatives trading dulls in our minds.
Gun-shy investors are looking for alternatives to the traditional stock and bond market in an attempt to recoup
even a little of the losses that brought on a recession. And the life settlements market is delivering - in some
cases, one life settlement company's five-year return outlook hovers around 62 percent. The industry's capital base
saw a boost of 600 percent. So with numbers like that, how volatile is the life settlements market?
In truth, life settlements do have some inherent volatility, but are less volatile than their traditional financial market counterparts. In a recessionary market, sales prices and returns on investment will be lower as more people flood to the market looking for more stability. While the market is not likely to crash, there are the unknowns - insurance carrier bankruptcy, improved mortality rates, or insurance company credit risks. All these factors can add risk to the portfolio.
Life settlements differ from traditional investment markets in that there are tangibles that will always exist - the policy, the insured, and the death benefit. The unknown variable is the life of the insured. Expectancy can be calculated, but the length of the insured's life is far from an exact science. And while actuaries do an excellent job of modeling future life expectancies, underwriters are the ones doing the actual life expectancy calculations, a practice that's unlikely to change since insurance companies do not espouse the life settlements industry. Underwriters make a best guess based on complex calculations that factor age, health, and other unique class factors. Close, but the actual payout date could vary greatly from expectations, thus devaluing the life settlements deal. Not exactly a market crash, but certainly a market detractor.
Savvy investors get around the life expectancy volatility by adding more policies to the investment pool. This helps investors avoid losses should the insured group's shared underlying condition vastly improve due to medical breakthroughs. Also, investors need to examine the similarities among the pool insureds, specifically age, health condition, and life expectancies. A more diversified portfolio will be priced higher, but will come with seemingly less mortality volatility.
Another underlying risk to life settlements investors are the insurance companies themselves. The financial health of the insurer, as well as its premium practices, could adversely affect the value of the life settlements investment. For that reason, investors need to make sure there's a diversified insurer base. Too many policies issued by one carrier carries a much greater risk of loss than a portfolio with several insurance companies in the mix.
An ideal life settlement portfolio will have different age, health, gender, policies, and underwriting practices. Work with your life settlements broker to examine closely the characteristics of your particular investment group. Give King Capital Consulting Group ,Inc a call at 310-975-9351. Our life settlement experts can help you determine the volatility of your life settlement offers and help you make the right decision.



In King Capital Consulting Group we always think Honesty is the best policy, We started this business in Early 2009, However we had years of experience in financing , with having said this premium financing is something we started in 2009.
These days, everything is getting changed, But Our Commitment doesn't!

Financial Planning and our Company

What Is An In-Force Ledger And Why Are They Important To Life Settlements?

One of the more important features of a life insurance policy is often the most overlooked. The in force insurance ledger (or in force ledger, as it’s sometimes called) is a computer-generated illustration of a cash value life insurance policy’s current, projected, and guaranteed values. Typically these illustrations show values over a 20-year period beginning with the current year. Agents will generate assumptions of premiums, interest, and policy withdrawals to prepare the illustration.

So why does a policyholder need an in force ledger? Most policyholders with universal or variable life policies have seen a decline in the values of their policies in the current recessionary market. Back in 2002, the life insurance industry was wracked with a two-year decline in stock prices and interest rates, which adversely affected life insurance policies. As a result, policyholders whose policy premiums were being funded out of projected interest amounts were finding that their premiums were going unpaid and their policies were in danger of lapsing. Those policyholders who knew enough to get an in force ledger illustration from their agents were able to stave off the bleeding and preserve the value of their policies. Life insurance agents also use in force ledgers to help their customers compare existing permanent life insurance coverage with a potential new policy.

For Life Settlements markets, in force ledgers give Life Settlements providers an illustrated view of the projected future costs and coverage of a particular policy. Those policyholders considering applying to the Life Settlements market need to provide this status report to the providers as proof of the policy’s current status, history, and valuation.

Also, using an in force ledger to get a comprehensive view of your policy’s performance is a great idea if you’re considering your life insurance options. Is entering the Life Settlements market right for you? It could be, based on what your in force ledger illustration shows. Life Settlement brokers are able to help you determine your policy’s viability, but be careful. Do not compare your policy or any replacement coverage/Life Settlements deal using limited policy information. You need a year-for-year performance picture based on calendar years, not policy years. In other words, compare similar criteria in terms of guaranteed and illustrated cash values and death benefits. That means comparing the exact same time frame from policy to policy. Do not make the mistake of comparing the current policy’s past performance with any new policy’s future performance.

What your life insurance policy’s in force ledger will tell a Life Settlements provider and investor is the projected future premium costs of your policy and what it will take to keep that policy in force until a specific age or until policy maturity. It’s yet another tool to help investors decide the value of placing a Life Settlements offer with you.

To go over in force ledgers and understand how your policy’s valuation affects your chances at a Life Settlements deal, contact King Capital Consulting Group Inc. Our advisors and specialists can assist you in obtaining an in force ledger from your insurer and understanding your options. Call us at 310-975-9351.