Are life settlements good for policy owners?
Yes. In the Fall of 2003, the American Bar Association’s Real Property, Probate and Trust Journal published a 2002 study conducted by the Wharton School of Business entitled, “The Benefits of a Secondary Market for Life Insurance Policies.” Extolling the consumer benefits of the burgeoning life settlement industry, the researchers found that in 2002 alone, life settlement transactions enabled consumers to receive $336 million, which was $242 million above the total cash surrender value they would have received had they surrendered their policies back to the issuing insurance company. By allowing investors to bid for unneeded policies, “the secondary market has created greater consumer choice and favorable valuations for consumers.” The study concluded that, “the secondary market for life insurance is both pro-competitive and pro-consumer.” And, over the past five years, the financial benefits to consumers have accelerated with life insurance policy owners having received more than $3 b
