The market for insurance has seen so many unique opportunities arrive in such a short period of time. At Melville Capital, we strictly focus on Life Settlements. However, our transactions are frequently confused with other opportunities that are being talked about today.
- Investor Owned Life Insurance (IOLI) - Sometimes referred to as “non-recourse premium financing” this strategy is employed with an extremely healthy senior who rates millions in insurance coverage. A non-recourse loan is made to cover premium payments and at the end of the two year contestability period the senior is paid a fee for participating while the owner and beneficiary change to the investment group. These deals are under tight scrutiny by insurance carriers for obvious reasons and thus are harder to get approved. Many carriers now require a statement on the insurance application certifying coverage is not being taken for investment purposes. New York State has deemed these contracts "invalid" and other states are following suit and as a result, many believe this marketplace has come to the end of its lifespan.
- Viatical Settlement - Regulatory usage of the terms “viatical settlement” and “life settlement” varies by state. However, the market generally uses the term viatical settlement to refer to instances where the insured is terminally ill with a life expectancy of less than two years. A life settlement focuses on policies insuring older individuals with life expectancies greater than two years.
- Investment opportunities - A Life Settlement proposal is not a proposal to raise investment capital to invest in the purchasing of policies. Melville Capital does not seek capital for investment purposes. All settled policies are sold to institutional investors who understand this marketplace. Some of these investors include Morgan Stanley, Citigroup, JP Morgan and very large hedge funds. Be weary of anyone soliciting investment to purchase policies and/ or any group willing to sell policies to individual investors.
The Life Settlement market is flourishing. Presently 32 states regulate Life Settlements and the National Association of Insurance Commissioners recognizes them as a viable solution that will remain active in the insurance marketplace. The AICPA as well as the American Bar Association recognizes an advisor’s fiduciary duty to discuss settlement options with their clients.
Melville Capital’s team of licensed insurance professionals understands the Life Settlement marketplace and how to maximize client offers. We created the largest network of institutional investors who bid against each other, similar to an auction process, thus ensuring the client the highest possible offer. Advisors entrust us with their clients and have done so for over 17 years. Learn why today.
How does the Process Work? 
