Boomers Ready for Life Settlement Option
By Michael K. Stanley
January 26, 2012
As Boomers feel increasingly
uncertain about being able to meet their retirement goals by the time they turn
65, they are turning to unconventional financial vehicles to meet their needs,
including life settlements.
This was the conclusion of a survey
recently released by International Communications Research (ICR) and commissioned by The Lifeline Program, a
life settlement company. The study found that more than half of its respondents
(55%) lacked confidence of being able to retire at 65. As such, they are primed
to consider unconventional financial vehicles with which to build retirement
savings. One such vehicle, the survey points out, is life settlements.
Life settlements, however, struggle
from a persistently negative reputation. The primary carrier industry often
lumps them in with stranger-originated life insurance (STOLI), and stories of malfeasance by agents
selling life settlements (or
merely purporting to) do not help matters.
Despite this, the Lifeline study
notes that some 79% of respondents felt that their insurance professionals and
financial planners should inform them about life settlements as a way to fund
their retirement, rather than letting life insurance policies lapse.
There is a lack of information and
people are scared of what they dont understand, said Robin S. Weinberger,
director of national accounts for Life Insurance Settlements Inc. To not offer
the life settlement option is almost immoral.
Other findings from the survey
include:
- Almost one-fourth of Baby Boomers (23%) would consider
selling a life insurance policy for a portion of the face amount.
- Those living in Metropolitan areas are more likely to
consider selling compared to those living outside the cities.
- 29% of Boomers would consider selling a life insurance
policy to fund their retirement.
- Lower income Baby Boomers (under $25K) are more likely
to consider this.
- Of the 79% who felt they should be informed of life
settlements as a retirement funding option, most have high income ($75K or
more) vs. those with incomes under $25K, and most live in the Northeast
vs. the Midwest
- 76% of Baby Boomers say people over the age of 65 should
have life insurance.
- African Americans, Women, Southerners and those under
55 are most likely to say this.
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