Life Settlement Market Expert Video Series
Trends in the Life Settlement Direct to Consumer & Advisor Markets
Learn about the untapped potential of the life settlement market with Abacus Life. Chief Executive Officer Jay Jackson shares insights on the direct to consumer & advisor market trends and underscores the importance of education to maximize the life settlement industry’s growth.
TRANSCRIPT
Jay Jackson, Chief Executive Officer, Abacus Life
Hi, I'm Jay Jackson. I'm the CEO of Abacus Life, and for almost 20 years, we've been purchasing life insurance policies from seniors and financial advisors to help them understand the true market value of their life insurance.
What Trends Are You Seeing in the Director-to-Consumer Market?
The trend that we see is about education. The issues we face in the direct-to-consumer market are really about the lack of knowledge that this financial opportunity exists for them. There's $13 trillion of life insurance in force. That's two and a half times the U.S. residential real estate market. Yet 90% of those policies will never pay a claim. People over the age of 65 last year lapsed $233 billion. While in the meantime, if they had considered selling their life insurance policy for a fair market value, they would have received several multiples of that. So, the trends that we're seeing in direct to consumer is education, first and foremost, providing them the data and the information so that they can make an informed decision about the real value of their life insurance policy.
And What About the Direct to Advisor Market?
We focus quite a bit on the direct to advisor market specifically because it's important that consumers have another layer of advice and understanding of their financial needs. Their life insurance policies are a valuable asset. Many times, they should consider keeping that policy, and that financial advisor or insurance agent can provide guidance and advice as to whether they want to retain this asset. Either way, it's important that we spend the time to educate financial advisors that this financial option even exists for their clients. We know that 49% of financial advisors don't discuss life insurance. Forget the fact that they're not talking about selling their life insurance policy for what might be fair market value. Instead, they're ignoring the entire industry. And that means that we have such an amazing opportunity, and more importantly, from a financial advisor's point of view, this can generate a significant amount of increased assets under management so that they can now go out and put those other assets to work and potentially better solutions for their clients.
What is Your Outlook for the Overall Life Settlement Market?
Our outlook for the overall long-term life settlement market is significant growth, as we've discussed many times. This is a $13 trillion industry—last year, for those over 65, $233 billion lapsed without ever paying claims. Our industry captured about 4 billion of that. We're currently at about 2% market share of the policies lapsing. Right. So, when we think about the long-term growth prospects of this industry, it's significant. There are a lot of miles left on this road. We need to focus on how to get this education out to consumers and financial advisors. So, it becomes the single most important piece of their estate plan that they continue to talk about on a regular basis.