Many life insurance companies and industry organizations have fought life settlements by advocating overly restrictive legislation that would handicap the industry.
In addition, they oppose legislation that would require companies to disclose to senior consumers, that are about to lapse or surrender a policy, that other options like a life settlement exist. Leading the way in this battle have been some of the nation's largest mutual insurers.
As discussed in our last month's article, almost all life settlement transactions are done with universal life and term life insurance policies that are convertible to universal life. It is, indeed, rare that a whole life policy gets offers in the life settlement market.
Although many mutual insurers sell universal life, traditional whole life is still usually their core product. Therefore, the impact of life settlements on most mutual insurers' in force books of business is even less than the minimal impact on universal life companies' books of business, which makes their strong opposition quite mysterious.
