SOURCE: J. G. Wentworth

May 20, 2008 10:14 ET

What Do Bankruptcy Trustees Need to Know About the Evolving Secondary Market for Sales of Life Insurance Policies?

Life Settlements May Unlock Hidden Value for Creditors, Says J.G. Wentworth

BRYN MAWR, PA--(Marketwire - May 20, 2008) - Because it has been traditionally considered an illiquid financial asset, a debtor's life insurance policy typically receives little attention from many bankruptcy trustees. Due to an evolving secondary market for life insurance over the past several years, however, bankruptcy trustees may now be able to unlock the value of a life insurance policy for the benefit of creditors through a life settlement transaction, according to specialty finance company J.G. Wentworth.

With the evolution of the secondary market for life settlements, Scott Willkomm, CEO of mortality-linked products for J.G. Wentworth, suggests bankruptcy trustees consider these three points:

--  First, the life settlements market is no longer focused only on the
    high-net-worth market, with policies in the $1 million and up range.  J.G.
    Wentworth Life Settlements, LLC can buy policies as small as $50,000 as
    well as very large ones.
--  Second, selling a policy is no longer a difficult and time-consuming
    process, and no medical exam is required.
--  Finally, the life settlement market has become much broader through
    enhanced regulation by the states, the proliferation of standard industry
    business practices and capital from major institutional investors.
    

"Before the development of the life settlements industry, few trustees looked to the value of existing life insurance policies to maximize the value of the bankruptcy estate," Willkomm added. "That perception is changing rapidly with the development of these new tools for monetizing the value embedded in life insurance policies."

Willkomm pointed out some areas of interest for bankruptcy trustees:

--  The secondary market for life insurance is a highly specialized
    market, and the ultimate determinant of an individual policy's value is how
    effectively the sale process is managed.
--  Contact a reputable buyer of life settlements to get a  fair
    assessment of the value of a  life insurance policy.
--  Knowing the determinants of value that drive pricing in the secondary
    market for life insurance is beneficial for seeking to identify special
    situations when valuing a policy.
--  The sale of a policy and committing the proceeds for the benefit of
    his creditors may provide a debtor with a way to retain or preserve
    unrelated, non-exempt assets.
    

About the J.G. Wentworth family of companies

J.G. Wentworth, Inc., based in Bryn Mawr, PA, is the nation's oldest, largest and most respected buyer of deferred payments for illiquid financial assets like structured settlements, annuities and, through dedicated subsidiaries, life insurance policies. Since 1992, J.G. Wentworth has purchased over $3 billion of future payment obligations from consumers and is also the nation's largest securitizer of structured settlement and annuity backed notes. The company's notes are rated AAA by Standard & Poor's and Aaa by Moody's.

For more information about J.G. Wentworth, go to www.jgwentworth.com.

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