As Boomers feel increasingly uncertain about being able to meet their retirement goals by the time they turn 65, they are turning to unconventional financial vehicles to meet their needs, including life settlements.
This was the conclusion of a survey recently released by International Communications Research (ICR) and commissioned by The Lifeline Program, a life settlement company. The study found that more than half of its respondents (55%) lacked confidence of being able to retire at 65. As such, they are primed to consider unconventional financial vehicles with which to build retirement savings. One such vehicle, the survey points out, is life settlements.
Life settlements, however, struggle from a persistently negative reputation. The primary carrier industry often lumps them in with stranger-originated life insurance (STOLI), and stories of malfeasance by agents selling life settlements (or merely purporting to) do not help matters.
Despite this, the Lifeline study notes that some 79% of respondents felt that their insurance professionals and financial planners should inform them about life settlements as a way to fund their retirement, rather than letting life insurance policies lapse.
“There is a lack of information and people are scared of what they don’t understand,” said Robin S. Weinberger, director of national accounts for Life Insurance Settlements Inc. “To not offer the life settlement option is almost immoral.”
Other findings from the survey include:
- Almost one-fourth of Baby Boomers (23%) would consider selling a life insurance policy for a portion of the face amount.
- Those living in Metropolitan areas are more likely to consider selling compared to those living outside the cities.
- 29% of Boomers would consider selling a life insurance policy to fund their retirement.
- Lower income Baby Boomers (under $25K) are more likely to consider this.
- Of the 79% who felt they should be informed of life settlements as a retirement funding option, most have high income ($75K or more) vs. those with incomes under $25K, and most live in the Northeast vs. the Midwest
- 76% of Baby Boomers say people over the age of 65 should have life insurance.
- African Americans, Women, Southerners and those under 55 are most likely to say this.