SOURCE: Life Insurance Settlement Association

Life Insurance Settlement Association

October 06, 2009 11:39 ET

LISA Responds to ABC Report on the Life Settlement Market

ORLANDO, FL--(Marketwire - October 6, 2009) - Yesterday, World News Tonight (ABC) considered Life Settlements. Producers of the program found a physician consumer, Dr. Eddy Powell, who had happily sold his life insurance policy for far more than the value which the life insurer would have offered him at the time. Dr. Powell sold the policy for a value which required the buyer to pay the premiums for the rest of Dr. Powell's (presumably long) life. In the ABC piece, Dr. Powell expressed regret for having sold the policy because, though the sale afforded him the ability to pay off his debts, he was no longer the owner of the policy. According to some experts, Dr. Powell appeared to have forgotten that, before considering the life settlement option, he faced two unsavory choices: sell his policy to the insurer for pennies on the dollar or allow it to lapse for a complete loss. The Life Insurance Settlement Association (LISA) encourages people who can hang onto their policies to do so, but for those who would otherwise lapse or surrender their policies, the settlement option should be considered wherever possible. The public needs to know that they have choices and that a life settlement is one of them.

"The fact of the matter is that for well over a decade, consumers have asserted their property rights in life settlement transactions and, for the vast majority of these, this decision has proven extremely lucrative. For all of the recent poor media coverage, complaints, as recorded this year by the National Association of Insurance Commissioners (NAIC) are... zero," points out Doug Head, Executive Director of the Life Insurance Settlement Association.

Russel Dorsett, President of LISA, recently testified before Congress on the benefits of life settlements to American consumers. In testimony to the House Subcommittee on Capital Markets, Insurance and Government-Sponsored Enterprises, Mr. Dorsett reported that American consumers have benefited greatly from the life settlement market and have received nearly $10 billion over the past decade, "making it possible for them to afford retirement, medical care, or simply to enjoy the lifestyle they have earned," said Dorsett, continuing: "The average settlement pays policy owners 4 to 6 times the policy's cash value."

As Dorsett further explained to World News tonight, life settlements are a tiny fraction of the huge life insurance industry which includes annuities, life insurance and other products that amount to tens of trillions of dollars of value. Life settlements help people get back part of that value, rather than giving it up to their life insurer. Dorsett established the clear and unambiguous distinction between the activities of Wall Street, which has not yet seen any securitization of settlements on any trading floor, and the thousands of senior citizens who, each year, carefully weigh their financial options in favor of life settlements.

Responding to the House Financial Services Subcommittee concern over the recent abuses of Wall Street in other markets, Mr. Dorsett told Congress: "The life settlement marketplace isn't actually about Wall Street at all. It is, rather, about providing older Americans with the opportunity to profit from an asset for which they have bought and paid. It is about allowing seniors to benefit from a life insurance policy while they are still around to enjoy it." To this, one congressman responded, "I don't think that this industry should be called upon to answer for the serious abuses that pervaded this economy in other areas over the past two years."

Following the recent congressional hearing, Mr. Head declared: "The hearing helped clear many of the misconceptions currently circulating in the press. But we are sure that industry opponents will continue their attempts to link this consumer-driven industry with the excesses of Wall Street. Nothing could be further from the truth. If we learned anything from the discussion it must surely be that a small but truly extraordinary financial option must be preserved and protected for American seniors. Thousands of Americans who need and can use this option will not give it up easily. Good public policy will help them to preserve their property and their rights."

For those interested in learning more on this asset class, please attend LISA's 15th Annual Fall Conference, November 8-10, in New York City. Investors can also benefit by attending the Free Life Settlement Investor Workshop on November 8th. Please visit:

Established in 1994, the Life Insurance Settlement Association is the oldest and largest trade organization in the industry. Its goal is to promote the development, integrity, and reputation of the life settlement industry, and to promote a competitive market for the people it serves. LISA now represents over 135 members with a wide variety of interests in the industry. For more about the association, visit

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    Doug Head
    LISA Executive Director
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