Life Insurance, like stocks, bonds, and real estate, is an asset today more than ever. Your life insurance policy can be an income replacement or an investment for your current lifestyle or needs.

Thus in the late 1990’s a market emerged called the Secondary Market for Life Insurance Policies, or the Life Settlement Industry. The Life Settlement market is a relatively new industry yet represents an important component of estate and business planning. Though the specific market size is unknown, according to A.M. Best Co. life settlement purchases have climbed from $2.5 billion in 2003 to more than $16 billion in 2007 and according to Bernstein Research will exceed $160 billion annually in the next few years. Currently, the market is moving quickly from the obscure to a fiduciary consideration for financial professionals when advising clients whether to retain a life insurance policy. Now, more than ever before, there are more options for a senior citizen with respect to their life insurance policies and insurance planning.

Even though it is a relatively new industry, Blackhawk Wealth has partnered with professionals with over 6 years experience in this new market, and in itself has developed into a trusted professional in the Premium Finance and Life Settlement industries. We have the expertise to provide our clients with the best possible service in analyzing their options with respect to their life insurance assets.

From our deep roots in Financial Services and Wall Street capital rising, we work with a number of sophisticated funders beyond the traditional life settlement providers. Our unparalleled client service comes in the form of educational and industry materials to ensure our clients are fully educated on their choices with respect to this life insurance asset. In addition we educate agents in the field of premium finance and the secondary market for life insurance so they can better serve their clients needs.

A life settlement is the sale of an existing life insurance policy covering a person who has a limited life expectancy – normally 10-12 years or less. It represents a unique opportunity to extract maximum value of a senior’s existing life insurance policy and repurpose those funds for whatever financial needs they may have. Until recently, the owner of an unneeded or unwanted life insurance policy had two options – sell the policy back to the institution that issued it for its cash surrender value (if any) or allow the policy to lapse. Now there is a third alternative – a Life Settlement. Considering a Life Settlement in the secondary market for life insurance policies, a client can receive maximum value for his/her policy and receive multiple bids. Each new offer generated through the life settlement process results in more money for the client.

Blackhawk Wealth will assist in the brokering of an existing policy for an amount greater than the policy’s cash surrender value, or greater than the amount the policy owner would receive if they choose to allow the policy to lapse. In most cases, the policy being considered for sale is not performing to the expectations of the policy holder. Sometimes the original need for the policy has changed, and the premiums to keep it current have become a financial burden. A Life Settlement alternative should be explored if a client is over the age of 65, or with significant health challenges, and is considering surrendering or lapsing a life policy. When properly employed, a life settlement can offer an opportunity for a senior client to benefit beyond the cash surrender value. Please see some of the Life Settlement examples below:

Many policy holders are looking for temporary or permanent ways of smart investing, therefore, turning to premium finance options with a no out-of-pocket alternative.

Life Settlements are a unique Investment opportunity for any accredited investor irregardless of age, but yet posses a distinct and minimal, set of risk factors which are not directly correlated to the risks associated with the stock and bond markets, interest rates, oil prices or business cycles like many other financial instruments.

Accordingly, Investing in Life Settlements offers the opportunity for the individual accredited investor to diversify their holdings with a non-market correlated asset that offers the potential for (but not a guarantee of) a superior return on investment.

A sophisticated Individual investor should realize the unique diversification opportunity that Life Settlements present as a part of a balanced investment portfolio.

The Supreme Court case of Grigsby v. Russell (1911) established the policy owner’s right to transfer an insurance policy. Justice Oliver Wendell Holmes noted in his opinion that life insurance possessed all the ordinary characteristics of property, and therefore represented an asset that a policy owner could transfer without limitation. Holmes states, "Life insurance has become in our days one of the best recognized forms of investment and self-compelled saving."

This opinion placed the ownership rights in a life insurance policy on the same legal footing as more traditional investment property such as stocks and bonds, as with these other types of property, a life insurance policy could be transferred to another person at the discretion of the policy owner.

This decision established a life insurance policy as transferable property that contains specific legal rights, including the right to:

• Name the policy beneficiary
• Change the beneficiary designation (unless subject to restrictions)
• Assign the policy as collateral for a loan
• Borrow against the policy
• Sell the policy to another party

A second milestone occurred in 2001 when The National Association of Insurance Commissioners (NAIC) took a crucial step by releasing the Viatical Settlements Model Act defining guidelines for avoiding fraud and ensuring sound business practices.

Around this time, many of the life settlement providers that are prominent today began purchasing policies for their investment portfolio using institutional capital. The arrival of well-funded corporate entities transformed the settlement concept into a regulated wealth management tool for high-net-worth policy owners who no longer needed a given policy.

Strong demand for life settlement policies is driving a rapid market expansion.

Generally speaking, life settlements are an option for high-net-worth policy owners age 65 or older. Independent estimates report that among this group, 20% of policies have a market value that exceeds the cash value offered by the carrier.

And while many policy owners are unfamiliar with life settlements until a financial professional mentions the option to them, the concept has gained attention from high-profile proponents such as Warren Buffett, former U.S. Representative Bill Gradison, and numerous media sources including The Wall Street Journal, Time Magazine, Business Week and The Economist.

A growing number of experts now believe that informing clients about offering life settlements and investing in life settlements should fall under the fiduciary duty of a financial advisor and life settlement expert. Like any investment, Life Settlements are not suited for all investors and may not be the perfect investment for everyone.

Peter Sollenne, President of Blackhawk Wealth, is a nationally recognized speaker on insurance strategies, Premium Finance strategies, wealth preservation, asset protection and wealth transfer strategies. Check our website regularly for upcoming speaking engagements or webinars.

Through our education process, you will hear strategies not typically utilized by other investment advisors and financial planners either because they are not aware of, they do not understand the Blackhawk strategies, or because they do not offer the products or services required to make these strategies work.

If you have questions or comments regarding services provided by Blackhawk Wealth Solutions, please contact us at our offices below or by email.

Corporate Office

7668 El Camino Real, #104-456
Carlsbad, CA 92009

Phone: 858-764-4415
Fax: 858-887-1862

Email: info@blackhawkwealth.com