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Magna: Life Settlements An Option that is Right to Know - YouTube
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- Every year, as premiums
become increasingly expensive,
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hundreds of thousands of senior Americans
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are left to give up their
life insurance policies.
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While many believe it's their only choice,
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a growing number of
states are now required
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to inform consumers of
their other options.
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To explore these options,
we travel to Austin, Texas
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and hear how Magna Life Settlements
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is one company working with
advisors and their clients
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to take advantage of new opportunities,
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boosting retirement finances.
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(dramatic music)
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- [Reporter] They say life is what happens
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while you're busy making other plans.
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Jayme Natal, Case Administrator
at Magna Life Settlements,
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knows firsthand the value
of a life settlement option.
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- Personally, if I would have known
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about Magna Life Settlements
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when my dad was diagnosed
with terminal cancer,
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I think that it would
have changed a lot for us.
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- [Reporter] A life settlement is the sale
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of a life insurance
policy to a third-party
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for more than its surrender value.
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Most life insurance policies
are considered assets
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under federal law,
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giving the owner the right to sell them.
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- A life settlement may be a good option
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for somebody that has a policy
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that they no longer need or want.
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- [Reporter] Magna Life Settlements,
based in Austin, Texas,
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is a top-ranked life settlement provider,
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with licensing in every state
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where insurance regulations require it.
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Jim Purdy, Director of Origination,
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says "Magna helps policy owners receive
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more settlement money, faster."
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- So a life settlement can provide
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substantial amount of value over
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what the insurance carrier
will pay the client,
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which gives the agent the ability
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to write other transactions
or solve some of the problems
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that the clients went to
see them for to begin with.
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- [Reporter] David Serra, President
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and General Counsel at
Magna Life Settlements,
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describes how the
benefits for policy owners
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can be substantial.
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- We offer them the opportunity
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to go from zero value, a lapsed policy,
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after years of paying premiums,
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to a windfall amount.
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- For insurance and financial advisors
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looking to offer their
clients new opportunities,
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the life settlement industry
is one poised for growth.
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Licensing and regulation
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are building confidence with policy owners
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and investors can purchase assets
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untied to bond and stock markets.
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- Insurance agents and financial advisors
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should know about life settlements
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because it's an emerging marketplace.
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We're hearing clients every day
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that are doing life settlements,
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that are using the proceeds
to fund long-term care,
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so they can buy a long-term care policy,
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purchase an annuity cause they're
about to go on retirement.
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They also, just so they can
take that trip of a lifetime
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that they've always wanted to take.
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- [Reporter]
According to Clay Gibson,
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Magna's Senior Vice
President of Origination,
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the time to explore a
life settlement is now.
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- And if you're not
talking to your clients
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and you're not taking advantage
of a life settlement option,
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then you're gonna get left behind.
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- [Reporter] Life settlements are slated
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to increase in popularity as baby boomers
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head into their next chapter.
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- There's a perfect storm right now.
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You have the largest-growing
demographic in our country,
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growing to 80 million retirees
over the next 18 years.
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There's a 100 billion dollars of policies
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that are being lapsed on an annual basis.
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And then health care costs are rising
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at twice the inflation rate.
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- [Reporter] In the past 20 years,
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life settlement regulation
across the country
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has strengthened.
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And experts say it's benefited
not only policy owners
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but the industry as a whole.
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Part of that new regulation
specifically includes
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what's called the Senior's
Right to Know Movement.
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- The Senior's Right to Know Movement
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is a recent development over
the last six or seven years.
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The insurance carriers,
now in eight states,
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are required to disclose life settlements
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as an option to their insureds.
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So if the insured is going to lapse
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or surrender a policy, it's
on the insurance carrier
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or the financial advisor to disclose
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that life settlements is an option.
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- [Reporter] Not educating clients
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about life settlements
could create a liability.
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Jeffrey Thompson,
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Senior Life Insurance
Marketing Consultant, explains.
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- Advisors need to be educated
about life settlements
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because really there's not
only a liability risk for them
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because if they don't expose
their clients to this strategy,
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there's a possibility they'll
have a professional liability.
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More importantly though,
it's a huge solution
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for their clients in cases
where they need money
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for other things.
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- [Reporter] Those other things can range
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from long-term care to retirement income.
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And for some, a life settlement could mean
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enjoying those golden
years just a bit more.
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(dramatic music)
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