Life Settlements 101: Why They’re Still Popular 100 Years Later

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If one scoured the internet for a bit, they would soon find that many people know little or nothing about living regulations or viatic regulations (they are similar but with slightly different stipulations).

With so many investment vehicles to choose from and everyone shoving one or the other in your face, it’s understandable that such investments were only a distant memory on your radar.

Additionally, there are readers who may have heard a thing or two about Lifetime Regulations, but have been told mostly negative things. For example, about seven years ago, rumors were circulating on the Internet that the regulations of life were “Ponzi schemes” or outright scams.

Even today, a number of these smear campaigns can be found here and there on the front page of Google’s SERPs. However, life settlements have been around for over a hundred years now and have always been fairly safe investments to put in a wallet.

A really quick story

Another negative stereotype often associated with life regulations is that shady investors lurk in the hallways of hospices and nursing homes. However, this couldn’t be further from the truth.

The first settlement of life took place at some point before 1910, as many historians know. The exact time of the transaction is relatively unknown.

What is known is that there was a man named John C. Burchard who had fallen on hard times and needed a medical operation.

Burchard offered his family doctor, Dr AH Grigsby, his life insurance policy in exchange for the operation, $ 100, along with a promise to pay the remaining premiums. Dr Grigsby agreed.

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When Burchard eventually died, Dr. Grigsby contacted the insurer to claim the benefits, but was contested by the executor of Burchard’s estate.

Although Burchard won the initial lawsuit, the executor ended up winning a state-level appeal. In 1911, the Supreme Court of Appeal agreed to hear the case.

The Supreme Court ruled in favor of Burchard’s physician, which led to Grigsby v. Russell, 222 US 149 (1911). This means that even though the transaction took place years ago, it was the Supreme Court ruling that allowed the insured to sell their policy to a third party.

How Eligibility for a Lifetime Settlement is Considered

For a person to be considered eligible for a lifetime settlement, they must first meet specific guidelines.

  • The policyholder is 65 years of age or over or suffers from a serious illness or health problem
  • The life insurance policy must be convertible term, full term or universal term
  • The policy must have a face value of $ 100,000 or more

For a more detailed estimate, financial institutions that underwrite life insurance policies offer consumers such tools as an online life settlement calculator.

How to choose a reputable life insurance settlement company

First and foremost, any reputable life insurance investment company will work with insurance companies and many qualified institutional buyers.

In most cases, if you can verify it without a shadow of a doubt, the company you invest with will have a good reputation.

Large investment firms won’t deal with shady brokers, and this is even truer for life insurance companies.

And anyone who is foolish enough to try to run a scam in this industry is bound to be discovered.

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A perfect case is when, in 2011, a federal court ruled in favor of insurance giant Prudential.

Prudential was awarded $ 10 million in the decision, as well as the right to retain an additional $ 620,000 in bonuses paid to the company by the scammers.

The court found that a Palm Beach life settlement broker, Steven M. Brasner, had fraudulently coerced seniors into taking out life insurance policies so that they could later sell them to Brasner clients, some of which were Wells Fargo and American International Group.

Finally, the life insurance contract industry is regulated by the Securities and Exchange Commission (SEC) to protect the interests of consumers.


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