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Life Settlement Glossary
L
- lapse
- The termination of a life insurance policy resulting from
non-payment of premiums or insufficient values necessary cover current
monthly deductions. During the lapse status a grace period applies that
allows policy owners to out more money into the policy in order to
preserve coverage.
- lapse rate
- The percentage of life insurance policies an insurance company has
in force that lapse.
- lapse supported products
- A life insurance product that requires a certain lapse ratio in
order to achieve profitability.
- late-remittance offer
- A simplified method of reinstating policies without requiring the
policyowner to complete the customary reinstatement application or
submit proof of insurability.
- level premium life insurance
- Life insurance policies whose premiums stay the same for the
duration of their term.
- level term life insurance
- Term life insurance policies that have level premiums (normally
guaranteed) for a specific duration. Following that, premiums normally
skyrocket upward annually rendering the policy unaffordable to
maintain.
- leveraged policy
- A policy with loans against the cash value by the insurance company
or one that has been pledged as collateral to an outside commercial
lender.
- licensed
life settlement broker
- For life settlements, a properly licensed individual or entity
whose primary responsibility is to negotiate the sale of a life
insurance policy by the policy owner to the buyer. Licensing
requirements vary by state but it is generally agreed brokers owe a
fiduciary responsibility to the policy owner.
- life
expectancy (LE)
- For life settlements and other financial transactions an estimate
of the probability of an individual surviving to various points in time
based on demographic statistics and medical information about the
person.
- life income option
- A life insurance policy settlement option that pays the beneficiary
a series of equal payments for as long as the beneficiary lives.
- life income option with period certain
- A life insurance policy settlement option that pays the beneficiary
(or their estate a series of equal payments for a designated period.
Thereafter, the payments will carry on only as long as the original
beneficiary lives.
- life income option with refund
- A life insurance policy settlement option where the insurer pays
the beneficiary an income for life with the guarantee that if the
beneficiary dies before the total amount paid under equals the proceeds
of the policy, the insurer will pay the shortfall to a contingent
payee.
- life insurance
- A contract between a company and a policy owner guaranteeing to pay
a stated sum upon due proof of an insured's death in accordance with
the contractual rights and responsibilities of both parties.
- life insurance cash surrender value
- The life insurance non-forfeiture value payable to a policy owner
when they terminate the policy before it matures or prior to the
payment of a death claim.
- life insurance companies
- Life insurance companies (formerly called guilds) have been around
since the middle ages and exist to protect beneficiaries from the
financial loss associated with the untimely death of an they are
financially dependent upon. These three main laws govern the
relationship that must exist at the time a life insurance policy is
applied for:
- The policy owner must possess a blood, legal, or business interest
in the person insured
- The insured must consent to the policy owner purchasing the life
insurance
- The policy owner must have a legal and economic interest in having
the insured's life continue
- life
insurance company ratings
- An evaluation provided by one of the insurance rating services
expressing their opinion of the financial soundness of an life
insurance company including the company's ability to pay a claim.
- life insurance
settlement
- A transaction whereby a buyer purchases from the owner the rights
to an unwanted life insurance policy for a sum of money that is greater
than the cash surrender value of the policy but less than the death
benefit.
- life
insurance settlements
- Transactions whereby buyers purchase owners the rights to unwanted
life insurance policies for sums of money that are greater than the
cash surrender values of the policies but less than the death benefits.
- life insurance settlement option
- The alternative that sometimes exists to cash surrendering a life
insurance policy that is no longer needed or wanted.
- life
settlement
- Same as a life insurance settlement: A transaction whereby a buyer
purchases from the owner the rights to an unwanted life insurance
policy for a sum of money that is greater than the cash surrender value
of the policy but less than the death benefit.
- life
settlements
- Same as life insurance settlements: Transactions whereby buyers
purchase owners the rights to unwanted life insurance policies for sums
of money that are greater than the cash surrender values of the
policies but less than the death benefits.
- life settlement advisor
- Ideally, a fee-based professional such as an attorney who advises
their a client regarding a life settlement but has nothing to gain or
lose from the client's participation or lack of participation in the
life settlement transaction under consideration.
- life
settlement advisors
- Fee-based professionals such as attornies, CPA's, CFP's who advise
their a client's regarding a life settlement but have nothing to gain
or lose from the client's participation or lack of participation in the
life settlement transaction under consideration.
- life
settlement agent
- Typically a life insurance agent or producer who acts under the
direction of a licensed life settlement broker. In some states,
however, life agents are pre-qualified to act as settlement brokers
because a life insurance license is the only broker requirement in
those states.
- life
settlement agreements
- The contracts between the buyer and seller that sets forth the
terms of the a life settlement transaction.
- life settlement alliance
- A strategic alliance of life settlement companies whose aim is to
create and maintain "fair practice" standards that govern the life
settlement market.
- life settlement articles
- A stand-alone piece of written information about the life
settlement industry that appears in magazines, newspapers, academic
journals, the Internet or any other type of publication.
- life settlement association
- The Life Insurance Settlement Association (LISA) was formed in 1995
and is America's oldest, largest, and most widely recognized life
settlement association. Its mission is to promote the integrity,
development, and reputation of the life settlement industry. It also
promotes a competitive market for those it serves. LISA participates in
regulatory and legislative matters in all 50 states, Puerto Rico, and
Canada. LISA also fulfills its life settlement association duties by
providing information to consumers, regulators, legislators, and other
interested parties.
- life
settlement auction
- A life settlement auction otherwise known as a life settlement
exchange enables policy owners working with their producer/advisor to
sell their policy in a secure online bidding environment.
- life settlement broker
- A properly licensed individual or entity who owes a fiduciary
responsibility to the policy owner (seller) to represent their best
interest in the negotiation and sale of a life insurance policy by the
policy owner (seller) to a buyer.
- life
settlement brokers
- Properly licensed and regulated individuals or entities who owe a
fiduciary responsibility to the policy owner (seller) to represent
their best interest in the negotiation and sale of a life insurance
policy by the policy owner (seller) to a buyer.
- life settlement broker agreement
- An agreement between a life settlement broker and a policy owner
detailing the broker's duties, responsibilities, and compensation
structures.
- life settlement business
- The entire life settlement industry including but not limited to
agents, brokers, providers, and funders (buyers).
- life settlement buyers
- The entities (typically institutional) that assume ownership of a
policy after is has been settled. Buyers are also referred to as
funders, purchasers, investors and financing entities.
- life settlement commissions
- The fee typically paid to a life settlement broker for representing
a policyowner in a life settlement transactions. Fee schedules are
usually based on a percentage of the face amount or a percentage of the
total offer from the buyer.
- life
settlement company
- Generally refers to any entity that is acting as either a life
settlement agent, broker, or provider.
- life
settlement companies
- Entities that act as life settlements agents, brokers, or
providers.
- life settlement contracts
- Often refers to the life settlement agreement in addition to
various other supporting documents that are required to fully execute a
life settlement transaction.
- life settlement dictionary
- An alphabetical listing of terms that apply to the life settlement
industry along with definitions for each term.
- life
settlement education
- Any course of study or informational material pertaining to life
settlements or the life settlement industry including any analysis or
forecast prepared by prominent independent life settlement research
firms who assess the future impact of growth or stagnation on various
industry stakeholders.
- life settlement ethics
- Standards within the life settlement industry related to the
priority of a client's interests, integrity, competence, and diligence.
- life settlement exchange
- Another term for a life settlement auction. Most agree that life
settlement exchanges work best when the market is vibrant and five or
more bidders are interested in buying a specific policy.
- life
settlement expert
- Seller beware. Many life settlement experts are self-proclaimed. A
better indication of expertise might be endorsements from satisfied
clients and how well the "expert" spells everything out in writing
before the process starts. Also, interview several before choosing one.
- life settlement financial
- The finanicial aspects of life settlement transactions.
- life settlement fund
- A fund created to allow individual investors to participate in the
life settlement market. As life settlements become more main stream in
the United States, shares in diversified securitized life settlement
pools and diversified life settlement funds may become more available
to individual life settlement investors who value these attributes:
- Steady, non-correlated returns
- Predictable liquidity
- Understandable and measurable risks
- life settlement funder
- The entities (typically institutional) that assume ownership of a
policy after is has been settled. Funders are also referred to as
buyers, purchasers, investors and financing entities.
- life
settlement funders
- Institutional buyers or other investors who acquire viatical and
life settlements.
- life
settlement glossary
- An alphabetical list of terms related to the life settlement
industry including definitions for those terms.
- life
settlement industry
- Each and every element of the life settlement business that has
direct or indirect influence on the life settlement process. These
include: insurers, life settlement agents, life settlement life
settlement brokers, life settlement providers, life settlement buyers,
life settlement auctions, life expectancy providers, insurance company
rating services, life settlement regulators, life settlement and life
insurance associations, life settlement advisors, and individual life
settlement investors.
- life
settlement insurance
- Any life insurance policy that has been confirmed eligible for a
life settlement, but not a policy an agent attempts to sell you today
under the assumptions it wll be eligible for a life settlement later.
Buyer beware.
- life settlement investment
- The total amount invested by a buyer (funder, purchaser, investor,
financing entity) into a life settlement transaction, including
expected future premiums.
- life
settlement investor
- Otherwise referred to as a buyer, funder, purchaser or financing
entity - a company or other business or legal entity that provides
capital to a viatical or life settlement provider for the purpose of
purchasing life insurance policies through viatical or life settlement.
The policysettlement.com definition of a life settlement investor is an
individual who buy shares in diversified life settlement funds or
securitized life settlement pools.
- life settlement investor pool
- A diversified securitized offering of life settlement policies.
- life settlement law
- Regulations governing the life settlement industry and life
settlement transactions.
- life
settlement market
- The current market conditions effecting life settlement
transactions including the most influential factors of supply and
demand, life expectancies, and the buyers required rate of return on
their life settlement investment.
- life settlement network
- A strategic alliance of life settlement companies whose aim is to
create and maintain "fair practice" standards that govern the life
settlement market.
- life settlement news
- Breaking information relating to any aspect of the life settlement
industry as reported by a reputable source.
- life settlement opportunities
- The possibility for opportunistic engagement in the life settlement
industry through any potential avenue of attachment.
- life
settlement policy
- A policy that has either been confirmed as eligible for a life
settlement through a viable written offer or a policy that has already
been purchased in a life settlement transaction.
- life
settlement policies
- Policies that have been determined to be eligible for life
settlements.
- life settlement problems
- Issues that occur before, during, and after a life settlement
transaction.
- life settlement process
- The identifiable steps of the life settlement process.
- life settlement producer
- Typically, a life insurance agent whose licensure qualifies them to
solicit life settlements under the direction of a licensed life
settlement broker. In some states, producers themselves may qualify as
brokers without additional licensure.
- life
settlement provider
- Unlike a broker who represents and owes a fiduciary responsibility
to the seller, a life settlement provider represents the buyer in
funding life settlement transactions. They may also buy policies for
their own portfolio, for resale to others, or for use in a securitized
transaction. Uninformed sellers should exercise extreme caution when
dealing directly with providers on their own or through agents who only
represent one provider.
- life settlement quote
- An estimate of the potential life settlement value of a specific
policy. Should at least be documented by a life expectancy estimate, an
inforce illustration of the policy, and a reasonable assumption of a
potential buyers expected return on their investment.
- life settlement quotes
- Estimates of the potential life settlement value of a specific
policy that are at least documented by a life expectancy estimate, an
inforce illustration of the policy, and a reasonable assumption of a
potential buyers expected return on their investment.
- life settlement regulation
- Any laws that governs a life settlement transaction.
- life
settlement regulations
- Laws that govern life settlement transactions.
- life settlement research
- Documented studies about the past, present, or future of the life
settlement industry completed by well recognized, reputable sources.
- life settlement risk
- Potential exposures to consumers and other stakeholders in a life
settlement transaction.
- life settlement
services
- Services that support the life settlement process such as life
expectancy providers.
- life
settlement standards
- Ethical standards within the life settlement industry related to
the priority of a client's interests, integrity, competence, and
diligence.
- life settlement
value
- The documented life settlement value of a policy evidenced either
by a written offer that resulted from a well managed competitive
bidding process, or an appraisal based on appropriate documentation and
a reliable process.
- life settlor
- A policy owner who sells a policy using a life settlement
transaction.
- LISA - Life Insurance Settlement Association
- The Life Insurance Settlement Association (LISA) was formed in 1995
and is America's oldest, largest, and most widely recognized life
settlement association. Its mission is to promote the integrity,
development, and reputation of the life settlement industry. It also
promotes a competitive market for those it serves. LISA participates in
regulatory and legislative matters in all 50 states, Puerto Rico, and
Canada. LISA also fulfills its life settlement association duties by
providing information to consumers, regulators, legislators, and other
interested parties.
- living benefits rider or provision
- A rider that allows for portion of a life insurance death benefit
to be paid for medical and long term care costs while this insured is
still living.
- loan (policy loan)
- A loan from the insurance company to the policy owner using the
cash value of the policy as the sole collateral.
- loan spread
- For life insurance, the difference between the interest rate the
policy owner pays to a life insurance company for a policy loan and the
interest the company credits to the encumbered cash value. For a life
settlement, the difference a buyer's cost of funds to acquire a life
settlement portfolio and the anticipated or actual return the portfolio
produces.
- longevity estimate
- Another term for a life expectancy or LE.
- loss ratio
- The percent of each premium dollar an insurance company spends
paying claims.
- loss reserves
- A liability carried on an insurance company's balance sheet that
represents their current best estimate of what they will disburse for
claims.
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