Life Settlements Offer Alternative for Seniors Facing Unsustainable "Universal Life" Insurance Premiums

GWG Case Study Demonstrates Benefit of Life Settlements

Aug 17, 2015, 09:00 ET from GWG Holdings, Inc.

MINNEAPOLIS, Aug. 17, 2015 /PRNewswire/ -- Many aging Americans are facing a significant unexpected financial challenge: Sky-high premiums for "Universal Life" insurance policies. As the Wall Street Journal recently reported (http://www.wsj.com/articles/cost-of-universal-life-insurance-stings-retirees-1439172119), holders of "Universal Life" policies – which were especially popular in the 1980s and are often structured to depend heavily on strong investment returns – are struggling to pay costly premiums to make up for years of low interest rates. The article recommends that policy holders "consider working with an agent to sell the policy on the life-insurance secondary market," an option illustrated by the following case study of an actual client of life settlement provider GWG Life, LLC.

 

Case Study of Alternative to Unaffordable "Universal Life" Premium Payments

Insurance Policy Owner 

80-Year-Old Female

Insurance Policy Type

Universal Life

Annual Insurance Premium

$26,860

Insurance Policy Value

$1,000,000

Insurance Surrender Value

$14,509

GWG Life Settlement Amount

$115,545

 

As this example illustrates, companies like GWG Life that offer life settlements can provide significant relief for seniors, many of whom may need access to funds to pay for long-term care, medical bills, living expenses and other necessities. In this case, the policy owner sold her policy to GWG Life for eight times the cash surrender value offered by the insurance company. (Based on a policy GWG Life purchased in 2011.)

"Financial concerns shouldn't loom large during our golden years, but the long period of historically low interest rates has put tremendous financial pressure on 'universal life' policyholders," said Jon Sabes, CEO and co-founder of GWG Life, LLC.

The cost of insurance premiums is a growing problem as the U.S. population gets older.  According to a 2014 Census report there were 40.3 million people aged 65 and older in 2010.  The percentage of the population aged 65 and over among the total population increased from 4.1 percent in 1900 to 13.0 percent in 2010 and is projected to reach 20.9 percent by 2050.

"Fortunately, effective solutions exist for many people who are 65 and older. I encourage policyholders struggling to keep up with unaffordable premiums to consult with their financial advisors to discuss options for relief, such as life settlements," said Sabes.

About GWG Holdings, Inc.

GWG Holdings, Inc. (NASDAQ: GWGH) is a specialty finance company and leader in the life insurance secondary market. GWG, through its subsidiaries, purchases life insurance policies from seniors who no longer want, need or can afford their policies. Since 2006, GWG has purchased more than $1.7 billion in life insurance policy benefits and paid seniors over $291 million for their policies – approximately $274 million more than the surrender or lapse value offered by insurance carriers. GWG's strategy is to originate and manage a diverse portfolio of life insurance policies that generate yields that exceed the costs to finance the policies (in aggregate). GWG finances the purchase and maintenance of a portfolio of policies primarily through a fixed income alternative investment product that is offered through independent broker-dealers and registered investment advisors nationwide. GWG's goal is to generate financial returns for GWG's investors and shareholders while providing valuable post-retirement financial solutions to seniors.

For more information about GWG, email ="file://gwgfp/gwgshare/Accounting/Audit%202014/Q4/Earnings%20Releases%20Calls/info@gwglife.com" target="_blank">info@gwglife.com or visit www.gwglife.com.

SOURCE GWG Holdings, Inc.



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