ATLANTA--(BUSINESS WIRE)--Approximately 40 percent of seniors have lapsed or surrendered their life insurance policies, according to a study cited in Conning Research & Consulting’s 2012 report on the life insurance settlement industry. Conning published the numbers from a survey performed in April 2010 among U.S. seniors by the Insurance Studies Institute.
The number reflects a tragic, long-accepted truth in the life insurance industry. An overwhelming number of beneficiaries will never claim the death benefit from their caretaker’s life insurance policy. In fact, life insurance companies rely on the high probability that they will never pay out a customer’s policy; they reap most of their profit from lapsed, unclaimed policies.
“Hopefully this serves as a wake-up call for baby boomers and seniors near retirement,” said Wm. Scott Page of The Lifeline Program. “When most people first buy life insurance, they almost never plan for the day when they will no longer be able to afford or no longer want the coverage.”
Page pioneered the life settlement industry more than 20 years ago. A life settlement is the sale of a life insurance policy for less than its face amount, but for more than the cash surrender value. The buying company pays the remainder of the policy premiums and collects the full benefit when the policyseller dies. Often a settlement provides five to eight times the amount offered if the policy was surrendered back to the insurance company.
“Many people aren’t even aware a life settlement is an option when they no longer need or can’t afford their life insurance,” said Page. “Unfortunately, too many seniors allow a policy to lapse and never see a dime.”
The Lifeline Program is a life settlement provider in Atlanta, GA. Founded in 1989, the company assists baby boomers, seniors and their families by purchasing unwanted or underperforming life insurance policies for immediate cash. The Lifeline Program actively partners with insurance agencies, financial planners and broker dealers to establish life settlement business lines and works closely with estate planning and trust attorneys. For more information on The Life-Changing Solution offered through life settlements, contact Stephen Terrell of The Lifeline Program at 770-724-7300 or visit www.thelifeline.com.