SIMPLY SMARTER, BETTER PROCESS
PROFESSIONAL, EFFICIENT, COLLABORATIVE, AND COMPLETELY TRANSPARENT.
Simple, understandable, straight forward.
We understand that as a wealth advisor or life insurance professional looking out for the best interests of your client and assessing the potential utility of a life settlement, while maximum bids and net proceeds are obviously of the greatest significance, a broader description of the value proposition of the transaction is important to consider. We deliver that.
We enable the price discovery benefits of real competition among multiple credible buyers without the opacity, inefficiency, and high cost of a broker. Importantly, you are intimately engaged in the process – with end-to-end transparency and an audit trail – and understood by your client to have been the driver of a high-value service win and significant windfall from an asset that would otherwise have been forfeited for little or no benefit.
All executed in a secure ShareFile bid room, not via e-mail and phone calls.
20+ buyers reached through 10 regulated intermediaries
80% of auctions successful
15/60 days to actionable bids & closing/funding
How we generate higher bids
our price discovery mechanism reveals a policy's true value
To understand how we generate higher winning bids, it is important to understand a few things about the life settlement market. First, it is not a market, per se, but rather a loosely organized universe of buyers in hedge funds, private equity groups, family offices, life insurance carriers, and direct buyers (like those seen on TV), so, knowing who and how to engage is critically important. Second, it is an inefficient market with divergent values that individual buyers ascribe to individual policies. Third, because it is asset constrained, inefficiencies can be leveraged to the advantage of sellers, if one can make it difficult/costly for buyers to bargain hunt.
While the analysis underlying the value of an in-force life insurance policy is complex and requires extensive domain expertise, the final calculation of the value is a simple DCF. Various risks are priced into an otherwise relatively simple IRR calculation, applying a discount rate to modeled premiums and death benefit over a mortality curve to arrive at a price. But, even small differences in any of the assumptions can result in highly variable valuations and the only way to compel buyers to bid as aggressively as their unique, "private value" dictates is our blind, best-and-final approach that punishes bargain hunting.
Why brokers don't reveal max value
brokers cannot find the maximum policy value through iterative "negotiations"
Brokers' descriptions of what they do to drive the price in a life settlement are utterly fanciful and all part of an effort to create the perception of complexity and of having created value where it wouldn't have been discovered without their engagement.
None of them is true. It is all a Kabuki Theater to convince you - confuse you - that their otherwise indefensible commissions, unseen in any other financial transaction. They will even misleadingly describe the commission as a function of the face value, citing "the lesser of 8% of the face value and 33% of the gross bid."
Further, the multi-round, open "negotiations" not only unnecessarily prolong the process, often to ludicrous lengths, but they place no cost on bargain hunting. In fact, quite the opposite; they reward bargain hunting, virtually ensuring that the winning bidder will not have revealed their true value in their bid, unless the second highest bidder coincidentally arrives at their maximum value in the same round.
WE ARE LOATHE TO WASTE YOUR TIME OR ENERGY
Rigorous, efficient, and expedient.
Our process is respectful of your and your client's time, effort, and, honestly, intelligence.
A simple, expeditious means to create competition among institutional buyers of in-force life insurance for your client's policy. If you are at all familiar with the incumbent channel, you will see how much less time we require to prepare for auction and the bidding process, which we complete in days, not months. If you and your client are responsive throughout the process to document and information requests, we typically complete transactions in 60 - 75 days.
Calendar: 1 day/<1 hour advisor time
While the market is the final arbiter of value, with a recent in-force illustration (level minimum premiums to age maturity/100+), we can provide a qualified range of values under various health and discount rate assumptions to inform a discussion between you and your client about the likely utility of pursuing a sale.
Calendar: 5 days/4 hours advisor time
You simply upload to our ShareFile bid room a copy of the policy, a signed HIPAA release form, two years of medical records (the more impaired an insured is, the more comprehensive the medical records that we'll need), the premium history (if a guaranteed product), and a copy of the Trust (if Trust-owned).
Calendar: 10 days/0 hours advisor time
The Providers that represent the major and reliable institutional capital review all submitted policy, ownership, and medical documents, and pose any clarifying questions or request additional documents (e.g., other illustrations, medical specialist) to you and your client to refine their assessment of policy value.
Calendar: 3 - 5 days/0 hours advisor time
Providers have 3 - 5 business days to submit a best and final bid and to detail any contingencies that will impact the amount of time and effort that you (the advisor) and your client will likely have to commit. If multiple bidders are within 5% of one another, we have a one-day run-off for bidders to refine their bid. This happens about 10% of our auctions.
Calendar: 15 - 30 days/3 - 5 hours advisor time
The winning Provider generates a purchase agreement, collects a small number of additional documents (e.g., photo of driver's license and social security card), signatures and attestations, and confirms that the policy remains in force. In those instances that our affiliated broker is involved, the seller also completes our "application," a statutory document, but only after you and your client have received a bid that is worthy of your time and effort.
Calendar: 5 - 10 days/0 hours advisor time
The buyer funds escrow, submits a change of ownership request with the carrier, and places the policy with a Securities Intermediary that holds the policy and escrow until the carrier transfers ownership, at which time funds are disbursed. The carrier is statutorily obligated to transfer ownership in <30 days, but typically executes in 5 - 10 days, and our fee is remitted.
