Rumson Capital Raises the Bar in the Life Settlement Industry with Full Disclosure of Offers; Rumson Capital the First Life Settlement Company to Offer Full Disclosure of Transactions
April 20, 2006 by Administrator

JENKINTOWN, Pa.–(BUSINESS WIRE)–April 20, 2006–Rumson Capital announced today that the company will be offering full disclosure of highest-bid life settlement transactions from financial institutions to brokers. Rumson Capital, an independent life settlement company that offers unique services to those seeking to maximize their financial assets, has decided to set a new standard and be the first life settlement company to offer full disclosure. Never before in the history of the industry has a life settlement company offered full disclosure regardless of regulatory requirements.

Unlike the pricing of new life policies, the price paid for a policy in a life settlement varies widely, and the determination as to whether the offer is fair may be difficult. As a result, brokers frequently face challenges including uncertainty whether they are provided with a fair price for a policy, and determining exactly what the highest offer is and where the money is coming from. To mitigate this, consumer advocates for viators recommend that at least three bids be solicited for policies. Raising the bar for the industry, by offering full disclosure on life settlement transactions, Rumson Capital will fully disclose to brokers and viators alike exactly how much the highest bid from the financial institution is as well as the commission that Rumson Capital will be receiving on the transaction.

Because the industry’s reputation has been plagued with controversy in anticipation of increased regulatory scrutiny, Rumson Capital has made the decision to fully disclose transactions while continuing to help make retirees’ wealth work better and harder and, ultimately, optimizing their quality of life.

“Realizing that the life settlement industry has been viewed as a lot of smoke and mirrors, we are trying to do our part to revolutionize an industry that needs more regulation and are hopeful that this will be the beginning of an industry-wide trend,” said Robert Meyer, vice president and general counsel of Rumson Capital. “If brokers have a clear understanding of an offer, life settlement companies will be forced to compete fairly, resulting in a greater benefit and more money to the viator. We challenge all life settlement companies to offer full disclosure.”

“It is about time,” said Todd Shelbaugh, director of insurance, National Wealth Advisors. “It is refreshing that Rumson Capital is offering full disclosure. One of the most challenging issues I face when negotiating a life settlement is the lack of transparency – ‘what is the offer, where is it coming from?’ Rumson is single-handedly changing the way brokers do business. I trust that I am providing my clients with accurate and credible information when dealing with Rumson Capital.”

In addition to full disclosure, Rumson Capital also offers OptimumLife(SM), a combination of software and analysis by in-house medical underwriters and financial analysts to more accurately determine if a life insurance policy is initially viable for sale, if a financial institution will make a sale offer and if the offer is reasonable.

Source: Business WireÂ

AIDS drugs bring change for viatical companies
April 13, 2006 by Administrator

By ELIZABETH WEILL-GREENBERG
Thursday, April 13, 2006

When Poz magazine founder Sean Strub sold his life insurance policy in 1995, he didn’t think he had much time left.

In the 1990s viatical companies sprung up to buy life insurance policies from people with AIDS and other terminal illnesses. Because AIDS was still considered a death sentence, the investors figured they were in line for a windfall.

“However, as time has passed, it is now clear that many people with HIV who viaticated their insurance policies are way ahead of the game, as they did not die on schedule,” said Strub, who is HIV-positive, in an e-mail interview.” I fall into that category.”

While Strub has had no trouble with his viatical company, a woman with AIDS in Pennsylvania has sued hers, Life Partners, because it has reportedly refused to continue to pay for her medical care. When M. Smith signed up with Life Partners in 1994, she was given only two years to live. She sold her $150,000 policy for $90,000 and was promised that Life Partners would pay her health and life insurance premiums until she died.

“Viatical became a wonderful investment when AIDS was predictably fatal,” said Gloria Grening Wolk, a consumer advocate and author of the book, “Cash for the Final Days: A Financial Guide for the Terminally Ill and their Advisors.”

Because of people like Strub and Smith, the viatical industry has switched its target market, and advertising campaigns, away from gays and HIV-positive people and toward the life settlement business, which is buying life insurance policies from healthy people 65 years old and older who are typically wealthy.

“I’m always a little nervous that one of the investors who purchased some of my life insurance might get a bit anxious to collect the death benefit, might make a good plot for a movie!” joked Strub. “One of my policies was resold to a group of individual investors in suburban Cleveland. It is odd for me to think that they are there losing money every day I continue to draw breath.”

In 1995 about seven viatical companies advertised in Poz magazine, said Megan Strub, the magazine’s publisher. Now only one still advertises, she said.

In last week’s issue of the Washington Blade no viatical companies advertised. More than a decade ago, it was a different story. In the April 9, 1993, issue of the Blade, there were five ads. One ad shows two well-dressed men beneath the text: “If you have AIDS and money is a problem | The Access Program purchases life insurance policies from individuals with AIDS, providing the money they needed for living today, quickly and easily.”

An ad for the Estate Trust Company promises “immediate cash” and “peace of mind” to “PWA’s terminal illness.” Another ad echoes that urgency and notes, “We put time on your side.”

Rather than viatical ads, readers of gay newspapers are more likely to find ads for AIDS drugs, said Ronda Goldfein, executive director of the AIDS Law Project of Pennsylvania, which is working on the Smith case.

“It’s no longer you might as well sell because you don’t have a future,” she said. “Instead, Sustiva is your future.”

A new life

In 1996, after protease inhibitors were announced at an AIDS conference in Vancouver, Dignity Partners, a viatical company, stopped buying insurance from people with AIDS and HIV.

“Everything was going smoothly until people stopped dying,” states a publication on viaticals by the AIDS Legal Referral Panel. “Investors anticipated a fast profit but were left with a return that could be decades away.”

The viatical industry dried up gradually between 1996 and 2000, as medications changed AIDS into a manageable, chronic illness, said Doug Head of the Life Insurance Settlement Association.

“AIDS especially brought to the marketplace people who were seeking funds for medical care,” he said. “People needed money before they were dead.”

The industry has changed as much as AIDS has changed since the 1980s, he said. There are about 50 viatical companies now from about 100 companies in the mid- to late-1990s, he said. The companies that didn’t switch to the life settlement business collapsed, he said.

“Fast forward to 2000, the viatical industry goes into the Dumpster,” he said.

In the 1990s, smaller policies worth between $5,000 to $200,000 were typically sold, he said. But as the industry has moved away from people with terminal illness and toward wealthy senior citizens, the policies sold now are no less than $200,000, he said.

“In the early days it was strictly AIDS patients,” said Bill Crust, founder and president of Viatical Settlements. “[But] two, three years ago we didn’t have anybody who would look at AIDS. They’re always coming up with another cocktail. God bless. I’m so glad to be pushed out of the business.”

But some worry that the industry has abandoned people who are terminally ill. While there were abuses, many people did benefit, they say.

“The industry made available hundreds of millions of dollars, maybe more than a billion, to people with HIV and enabled them to open businesses, realize life dreams, pay for health care and other expenses,” said Strub.”There was and is abuse, to be sure, but on the whole, I think people with HIV have gotten the better end of the deal.”

Wolk Grening said that terminally ill patients now can’t get the money they need. In the 1990s, people with AIDS and other terminal illnesses used the money from viatical settlements to buy medications or to buy a car to get to the doctor.

“This industry doesn’t exist for the same purpose anymore,” she said. “They’re not providing the benefit to people who need it.”

Association Commends National Insurance Group for Educational Efforts
April 11, 2006 by Administrator

ORLANDO, FL — (MARKET WIRE) — 04/07/2006 — The Life Insurance Settlement Association (LISA) today praised the National Association of Insurance Commissioners (NAIC) on its new national educational initiative, “Insure U,” designed to inform the public about the basics of insurance.

“This balanced approach to providing public information will help consumers and is a logical extension of the NAIC Mission,” says M. Bryan Freeman, board president of Orlando-based LISA. “As an industry, we have long recognized that Insurance needs change over time; in fact, we recognize that such change is the foundation of our industry. Life settlements address those changing consumer needs and the NAIC has once again recognized the value of the settlement option.”

A life settlement is the sale to a third party of an existing life insurance policy for more than its cash surrender value but less than its net death benefit. Such transactions are usually undertaken for the purposes of estate or financial planning.

“People do not need to settle for less than the real value of their policy,” Freeman adds, “and the NAIC is helping people recognize the ‘asset value’ of their policies through the important educational efforts of Insure U.”

Also praising NAIC’s recent efforts, LISA Executive Director Doug Head notes that NAIC materials consistently note the need to “Review (insurance coverage) Annually.” “The NAIC offers this important advice to the public: ‘Each year, check your policies to make sure that they continue to meet your changing needs,’” he says.

The Insure U curriculum, as announced by the NAIC, includes a basic introduction to the four major types of insurance — auto, home, life and health — as well as special considerations for young singles, young families, established families and empty nesters/seniors.

“Far too many policy owners think that their insurance needs, especially in Life Insurance are ‘fixed for all time’ when they first buy a policy,” Head says. “Our industry has brought the value of Life policies to the forefront. Educational efforts like those of the NAIC help us help consumers, just as responsible legislation to regulate the industry helps consumers.”

“It is especially noteworthy that senior consumers receive an explanation of the value of settlements on the Insure U Web site,” he says. “Life settlements are still a relatively unknown idea for many people and they need to be aware enough of the option to ask their (insurance) agents about it.”

The NAIC also offers settlement guidance to consumers through brochures created for distribution through state regulators, such as state insurance departments.

“There is much confusion about the settlement option,” Freeman concludes. “We heartily commend the NAIC for recognizing life settlements as a phenomenal benefit for consumers.”

Life Insurance for Property and Estate Taxes
April 4, 2006 by Administrator

It is common that many individuals are using a life insurance policy for future property and estate taxes. This a very financially beneficial decision and can benefit your heirs greatly. What happens is you sell the property, move, or want to downsize? Before you could continue to pay the hefty premiums, surrender the policy for cash value, or let it lapse.

Now with a Life Insurance Settlement, you can recevie a higher value for you unwanted life insurance and get an immediate lump payout. An example below is how a client greatly benefited from a life settlement.

A 76 year old male owned a $3,000,000.00 universal life policy with a cash surrender value of $120,000.00. The original intent of the policy was to cover estate taxes on a property owned by the insured. The property was later liquidated and the policy was no longer needed. Insured utilized a life settlement and received $300,000.00.

The client was about to cash surrender the policy when he heard about life insurance settlements, a quick phone call generated an extra $180,000.00 into his pocket! Call 1-888-973-8377 to speak with a Life Settlement Professional today.