Life changes. So do your clients' life insurance needs. We ensure that you can maximize the value of the life insurance that they no longer need.
We deliver the first and only life settlement solution that meets the highest standards of client care for conscientious, fee-only wealth advisors at top RIAs and Best Interest-oriented, principled life insurance professionals, ensuring complete transparency, effective price discovery, rational fees, and maximum proceeds to your HNW/UHNW clients from life insurance that they no longer want or need.
As buyers, we simply did not like how the incumbent channel treats policy sellers. So, in 2016 we decided to change things.
Alone.
We are on a mission to disrupt and replace a badly broken distribution channel whose members have for years placed their economic interests ahead of those of their clients. As buyers of in-force life insurance for seven years before founding this business, it became clear to us that the incentive structure and level of fees that characterize the incumbent channel levy a wholly unreasonable tax on policy owners, with very real psychic and economic implications for those who wish to sell a life insurance policy that they no longer want or need.
So, with a fundamentally different philosophy that underlies everything we do, we undertook to deliver a materially differentiated and better service for advisors of HNW/UHNW clients to ensure that you can deliver a life settlement solution worthy of your reputation and standards.
״We've used brokers for years, but knowing what we know now about how you operate versus what they do and what it means for our clients, we could never again in good conscience use them.״
Client Service Lead
$10B in-force specialty insurance advisor ($140B RIA)
The Basics
2016
YEAR FOUNDED
After several years as with a large private equity buyer of in-force life insurance, frustrated with opaque price discovery and poor client advocacy...we decided to change things
>30%
GREATER PROCEEDS
Based on the on our lower fees alone - even more with our higher winning bids; often hundreds of thousands and even millions of dollars in proceeds
7.5%
FEE FOR SERVICE
A transparent, simple, easy to understand fee for service, % of the value we help unlock, the winning bid less surrender value (min. $12,500)
10+
TOP 50 RIAs SERVED
HNW/UHNW RIAs with >$800B in AUM and a rapidly growing universe of principled life insurance professionals and their firms
Yes, a niche transaction. But, high quality counterparties, real capital, and substantive service wins for you.
What is a life settlement? Simply, the sale of an in-force life insurance party to a third party for more than the surrender value as an alternative to lapse or surrender.
“So far as reasonable safety permits, it is desirable to give to life policies the ordinary characteristics of property. To deny the right to sell except to persons having such an interest is to diminish appreciably the value of the contract in the owner’s hands.”
– U.S. Supreme Court, Grigsby v. Russell, 1911
Since 2010, the universe of buyers of in-force life insurance has become highly institutional, with many household name private equity, hedge funds, endowments, and private and public pensions having purchased policies. While there is not an organized market, per se, there are 20+ credible institutional buyers that will pay up to 60% of the face value of a policy.
The challenge for policy owners who might wish to sell a policy is ensuring that as many of those buyers as possible compete for the asset and that your client pays a rational fee for a transparent, expeditious price discovery process - or doesn't sell it at a discount to a single buyer that doesn't compete.
That's where we come in.
Meet us
All humility aside, we are the very best at what we do; we do not care about being the biggest, we care only about being the best and delivering for you and your clients. While we occupy a small corner of the HNW/UHNW wealth management world, we are wholly committed to delivering an outsized impact in that niche for our clients, the best wealth advisors and life insurance professionals in the country.
We are capital markets professionals with a deep understanding of what it means to service the HNW/UHNW marketplace, having worked with several of the largest and most highly regarded RIAs in the country. We speak your language, delivering a disciplined, transparent, and intellectually-rigorous price discovery process, grounded in a comprehensive understanding - borne of experience - of how institutional buyers value in-force life insurance contracts. And we have a intensive client service mentality, respecting your time, intelligence, and relationships.
PODCAST APPEARANCE -
FINANCIAL PLANNING ASSOCIATION
Hear in this episode of the Smarter Planner Podcast Belle Osvath, CFP, interview Scott about his company's innovative approach to helping financial planners work with their clients to sell life insurance policies that are no longer needed.
Organizing a disparate universe of institutional buyers of in-force life insurance, operating in an illiquid, inefficient quasi-market, to ensure expedient, effective price discovery for your clients.
We have helped advisors at top RIAs extract tens of millions of dollars from their clients' unwanted and surplus life insurance - and done so with an expeditious, completely transparent price discovery process, for which we receive a simple, transparent 7.5% fee (minimum $12,500) after your client has received their proceeds.
For principled, BI-oriented life insurance professionals, we enable you to do life settlements in a way that your clients receive maximum proceeds and that you receive fair compensation, typically as much (often more) as with brokers' much higher commissions because of our higher winning bids, and in which you can have confidence that you will be engaging in a highly professional transaction with credible institutional counterparties.
$2,550,000 winning bid
$191,250 1908 fee
$25 billion AUM RIA
91 year old healthy female
$5,700,000 GUL
Trust Owned/estate planning adjustments
$475,000 winning bid
$35,625 1908 fee
Life insurance GA
67 year old male (rare cancer)
$1,500,000 converted term (UL)
Individual owned (buy/sell agreement, post sale)
$437,400 winning bid
$32,805 1908 fee
Large national wirehouse
91 year old healthy female
$754,000 UL
Trust owned
$700,000 winning bid
$52,500 1908 fee
$9 billion AUM RIA
61 year old male (manageable cancer)
$2,000,000 converted term (UL)
Individual owned
$900,000 winning bid
$67,500 1908 fee
$25 billion AUM RIA
51 year old female (manageable cancer)
$5,000,000 convertible term
Key Man policy (retained upon sale of business)
$2,948,000 winning bid
$157,500 1908 fee
$9 billion AUM RIA
85 year old healthy female
$5,300,000 GUL
Charitable Trust owned
$2,600,000 winning bid
$50,000 1908 fee
UHNW Life Insurance Advisor
75 year old male/75 year old female
$29,000,000 GUL
Individual owned - wanted to exit premium loan
$5,300,000 winning bid
$265,000 1908 fee
UHNW insurance advisor (part of $140B RIA)
85 year old male/79 yeay old female
$12,000,000 GUL
Trust owned
$90,000 winning bid
$7,500 1908 fee
$140 billion AUM RIA
72 year old healthy male
$1,000,000 UL
Individual owned (was collateral on business loan)
A more frequent and substantive opportunity to do the right thing for clients and their families than most are aware
Each year, more than 40,000 HNW/UHNW households >72 years old forfeit (lapse or surrender) $75 billion of the $1.5 trillion of in-force permanent and convertible term life insurance, at least $50 billion of which likely has value in excess of surrender value to institutional buyers. But less than 10% of the policies are presented to market, half through direct buyers that you see on TV (and are unlikely to pay a competitive bid, for lack of competition) and the other half through egregiously expensive brokers that run ineffective price discovery and extract a third of the value of the transaction in commissions.
In order to create a better outcome for your client than lapse or surrender (or even keeping a policy that is not of sufficient utility to justify ongoing premiums), all you need is to know what to look for - from the most obvious observations, like there is no longer a need for a policy, to more nuanced analyses about the relative utility of a policy - and to start the conversation. And we can help with that.
>50%
>72 HNW/UHNW own at least one policy
>80%
lapsed or surrendered; 3% - 4% annually
8x/25%
Avg. settlement multiple of CSV and % of face value
What Sells
UL/VUL/Term
POLICY TYPES
Any permanent, cash value - or convertible into cash value - policy can work, depending on other factors (Whole Life policies rarely work)
<72
IF LESS THAN HEALTHY
This is a function of duration demand in the market, the longest of which is about 16 years (life expectancy)
>72
IF HEALTHY
for women, add two years and for joint policies on which both are alive, add another two years before a policy is likely to work
$500K - $100M
POLICY SIZE
Although we can help with smaller policies, there is little market demand, given the underwriting and admin costs relative to potential return
Recent Engagement
An UHNW life insurance consulting firm (who began using us three years ago after years of using traditional brokers), part of a $140B RIA, approached us about a client with a large life insurance portfolio who wanted to explore the sale of $9.8M second-to-die GUL (two policies) as part of a broader estate planning exercise for the 91 year-old couple.
The below results are why this firm, and others, engage us strategically to contemplate what the best course of action might be with all of their older clients with whom they are regularly assessing the value and utility of their life insurance portfolio.
$9,800,000
GUL
$4,300,000
Winning Bid
$3,977,500
Net Proceeds (fees: 1908 5%/Advisor 2.5%)
75
Days to Complete/Fund
We work with only the best
Not everyone wants to work with us. Those who prefer the commission structure of the incumbent channel are not fans, and we are ok with that. In fact, we prefer it, as we only wish to work with those who take their responsibility to serve the interests of their clients as seriously as we take our responsibility to enable you to deliver for your clients.
If you're wired like we are, we’d love to work with you and we are happy to provide references, upon request.
10+
Top 50 HNW/UHNW RIAs, with >$800 billion AUM
10+
BGAs/IMOs/Top UHNW Insurance Producers
Several
Various Trustees, T&E attorneys, other
Region Head, CFA
$15 billion AUM RIA
"I know our advisors just added a new tool to their toolbox and I’m excited to see our teams collaborate."
Partner (CLU, ChFC)
$10 billion in-force life insurance advisor (part of $140B RIA)
"My mind is analytical and I love it when someone dives deep into an industry looking for ways to improve it. You have certainly done that with your approach. You did a great job explaining to us why your firm is structurally different from the brokers we used in the past and I appreciate that and agree with your approach. We'll help many families together."
Head of Insurance
$120 billion AUM RIA
"I won’t even imagine the reaction of one of our advisors to learning too late that a life insurance partner that we work with didn't engage 1908 and put a shared client into a brokered life settlement and charged our client those outrageous fees."
Senior Insurance Advisor (CFP)
$9 billion AUM RIA
"We have seen time and time again direct evidence of the benefits of both higher bids and materially lower fees that accrue to our clients who want to do a life settlement as a result of using 1908’s service."
Vice President (CFP, CLU)
Large national life insurance broker
"Your approach aligns with where the true advice business for life insurance is going, including bringing real transparency to the otherwise murky industry of life settlements."
Managing Director (ChFC, CLU)
$30 billion AUM UHNW RIA
"1908's model has turned this sector upside down amidst all these cowboy brokers."
The right model and approach for principled, client-centric life insurance professionals
We know that most life insurance agents are familiar with life settlements and that many actually like the broker channel - the commissions are appealing, even if otherwise difficult to defend. Some don't want to take our call; as one put it to us, ”…they want the plausible deniability that they weren’t aware of the option when they recommend that their clients use a broker that will split a 30% commission."
If, however, you are solely committed to advancing the interests of your clients and you'd like to do life settlements for them in a way that ensures that they receive the maximum value for an asset that you sold them but that they no longer want or need, while still being equitably compensated, then we'd love to work with you.
And practically speaking - our higher winning bids often result in compensation (at our typical 5%/5% split) for the producer that is comparable to or greater than the higher % participation in broker transactions. So, you get to do the right thing for your client and likely make comparable compensation.
Simple, Fast, Effective Process
Our simple, transparent, expeditious price discovery process is respectful of your and your client's time, effort, and, honestly, intelligence. We typically deliver actionable bids in 5 days (after a two-week underwriting period), consummation and funding within 60 days, all requiring less than 10 hours of your time, most of which is only after you and your client know whether the winning bid is sufficiently compelling to move forward with the administrative effort of contracting.
Importantly, 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.
And everything is executed in a secure ShareFile bid room, not via e-mail and phone calls.
20+
BUYERS REACHED
80%
OF AUCTIONS SUCCESSFUL
15
DAYS TO COMPLETED AUCTION
60
DAYS TO FUND
Let's Talk
If you'd like to learn more about what we do and how we can be of service to you and your clients and their families, please reach out. We'd love to be of service.
Thank you.
Without you, your clients are on their own.
Are any of your clients objectively better off without you responsibly engaging them about monetizing an unwanted or surplus life insurance policy from which they might be able to extract hundreds of thousands or millions of dollars? Of course not.
Without you, only three things will happen; 1) 90% will do nothing, lapsing or surrendering the policy without ever assessing whether it might have value to institutional buyers, 2) 5% will engage a life settlement broker, being subjected to a confusing, prolonged process and ultimately ineffective price discovery that will cost as much as 30% of the proceeds in commissions to the broker, or 3) 5% will engage a single buyer that will acquire the policy from your client with a non-competitive bid, far less than what a competitive auction would produce.
We're here to help you ensure much better outcomes for your clients. And all you really need to do is start the conversation.
90%
will miss out entirely
5%
will pay egregious fees
5%
won't receive full value
Substantially higher winning bids
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 criteria - some generic to all buyers and others unique to individual buyers - and risks are put into an otherwise relatively simple IRR calculation, applying a discount rate to a projected stream of cash flows (premiums, death benefit) over a mortality curve.
Brokers’ multi-round, open bidding, on the other hand, is predicated on a belief that policies have a “common value” and that sophisticated buyers can be compelled to pay more than that, not only unnecessarily prolongs the process, often to ludicrous lengths, places no cost on bargain hunting. In fact, they reward bargain hunting, virtually ensuring that the winning bidder will not have revealed their value, unless the second highest bidder coincidentally arrived at their maximum value and dropped out in the same round.
It is only through our approach that those differences can be capitalized upon, resulting in faster, higher bids for your clients. To see the myths that broker perpetuate about how policies are valued and on what criteria buyers will bid versus the truth - and the implications on how long it takes and how effectively value is identified - visit the Process page.
About us
Who we are
Experienced capital markets professionals with extensive and broad domain expertise in the institutional market for in-force life insurance, aka “life settlements,” since 2016 with this company, seven years prior as buyers.
What we do
Provide efficient access to a universe of institutional buyers, ensuring transparent, effective, expeditious, and comprehensive price discovery and maximum proceeds for HNW/UHNW policy owners.
How we are different
We deliver substantively better outcomes - at least 30% higher net proceeds - in a transparent, much faster, and more confidence-engendering process than any other approach available to sellers or their advisors.