HarborLifeSettlements.com promises to pay you a lot of money in exchange for your life insurance policy. Find out everything you need to know about this company today in our review.
What Is Harbor Life Settlements?
Harbor Life Settlements, found online at HarborLifeSettlements.com, claims that its customers can “hit the retirement jackpot”. All you need to do is apply for a life settlement.
Life settlements are a growing trend in the United States. A growing number of American seniors are getting life settlements. Basically, a life settlement involves selling your insurance policy.
Harbor Life is one of many companies willing to buy your life insurance policy in exchange for a settlement.
How much money can you get? The Harbor Life Settlements website features stories of people who received $220,000 from Harbor Life in exchange for a $600,000 policy.
Obviously, there must be a catch behind Harbor Life Settlements, right? Let’s take a closer look at how these businesses work.
What Is A Life Settlement?
A life settlement is a cash payment you receive in exchange for selling your life insurance policy to a third party. That third party can be a company – like Harbor Life – or any entity other than the company that issued the policy.
The settlement is more than the policy’s cash surrender value, but less than the net death benefit.
The Financial Industry Regulatory Authority, or FINRA, recently issued a warning to seniors about life settlements. However, FINRA maintains that life settlements can also be a legitimate source of liquidity for older Americans:
“Life settlements can be a valuable source of liquidity for people who would otherwise surrender their policies or allow them to lapse—or for people whose life insurance needs have changed.”
Before the life settlement industry emerged, people had two options when dealing with a life insurance policy they no longer wanted or needed: they could surrender the policy for its cash value or allow it to lapse. The life settlement industry offers a third option: you can sell your policy (or the right to receive the death benefit) to an entity other than the insurance company that issued the policy. This transaction is called a “life settlement”.
When Did Life Settlements Emerge?
Life settlements emerged as an offshoot of the viatical settlement industry that developed in the 1980s. Viatical settlements gave AIDS patients and other terminally ill policyholders a source of liquidity. They became popular with those with a life expectancy shorter than two years.
What’s The Catch?
For most people, getting paid hundreds of thousands of dollars for a life insurance policy sounds great. So what’s the catch?
Here’s how FINRA explains the catch:
“[Life settlements] are not for everyone. Life settlements can have high transaction costs and unintended consequences. And even if you decide a life settlement is generally right for you, it can be hard to tell whether you are getting a fair price.”
FINRA recommends that people familiarize themselves with their existing life insurance policy to ensure they fully understand their options. They also recommend that people shop around for the best offer and only deal with licensed buyers and brokers before entering into a life settlement.
How Do Life Settlements Really Work?
Basically, someone buys your life insurance policy because they want to make money when you die.
You sell your life insurance policy to someone, and that person continues paying for that policy.
The people who buy life settlements are typically called life settlement companies or life settlement providers. Harbor Life Settlements is one such company. These companies are typically organizations that do two things with your policy:
- They hold your policy to maturity and collect the net death benefits or resell policies
- They sell interests in multiple, bundled policies (say, to hedge funds or other investors)
In exchange for giving away your life insurance policy, you receive a lump sum payment. The payment you receive will vary based on your age, your health, and the terms and conditions of your policy, among other factors. Typically, the life settlement company wants to pay you more than the policy’s cash surrender value, but less than the net death benefit.
In some cases, the life settlement company will pay you a lump sum for your policy along with an agreement to pay any additional premiums required to support the cost of the policy for as long as you live.
To be clear, when you sell a life settlement policy, the person who buys your policy has a financial interest in your death. They will benefit financially when you die. The sooner you die, the more money they make.
Are Companies Like Harbor Life Settlements A Scam?
Life settlement companies aren’t scams. It’s a legitimate industry. However, many people see the industry as controversial. Others describe it as “sleazy”.
Life settlement companies have been known to target old people – particularly old people with failing health. The sooner you die, the more money the life settlement company can make.
Life settlement salespeople have also been known for their aggressive sales tactics and abuse.
Nevertheless, that doesn’t mean that you shouldn’t consider a life settlement. Life settlements can be a great source of liquidity for a senior. If your children or other family are well-prepared financially, and you no longer need your insurance policy, then you may want to consider a life settlement policy.
How Does Harbor Life Work?
Harbor Life promises to pay customers up to 40% of their policy value in cash. They also claim to “pay for everything” and charge “absolutely no fees”. Plus, anyone can get a free estimate with no obligations.
You can request an estimate in less than 5 minutes online. And, Harbor Life will buy your policy in cash for as little as 10 days. They claim other companies typically take “6-9 months”.
So what’s the catch with Harbor Life? How does Harbor Life really work? Keep reading to find out.
What’s The Catch With Harbor Life?
Harbor Life makes everything seem easy, free, and convenient. They prominently advertise stories of how they paid someone $220,000 in cash for a $600,000 life insurance policy.
Plus, they do all of this without charging any fees. The company seems to be doing this out of the pure goodness of its heart.
Obviously, nobody gives away stuff for free online. So what’s the catch with Harbor Life?
Harbor Life does not actually provide life settlements to customers. Instead, they’re a “life settlement marketing company.” They collect leads for life settlement companies. Harbor Life likely appears to sell your contact information – like your phone number or email address – to these companies.
Harbor Life claims to refer qualified policy owners “to one or several licensed life settlement brokers or providers.” In exchange, “Harbor Life will be compensated for life settlement transactions that originate on www.harborlifesettlements.com.”
The company maintains that “there is no guarantee that every user will receive an offer.”
They also claim that their calculator has little connection to what you’ll actually receive from your life settlement:
“The Life Settlement Calculator is a tool intended to assist Harbor Life in the evaluation and qualification of life insurance policies. It is not intended to represent a bid or an actual offer to purchase a life insurance policy. Use of the Life Settlement Calculator tool does not guarantee that any life settlement provider will or will not offer to purchase a policy.”
Furthermore, by using that calculator, you’re giving Harbor Life permission to sell your contact info to any “licensed entity”:
“By using the Life Settlement Calculator tool, you authorize Harbor Life to send your information to licensed entities to contact you, including by telephone.”
Basically, Harbor Life will collect your information, pre-screen you, then sell your personal information to its partner companies. Those companies will almost certainly charge fees when buying your life insurance policy with a life settlement. Although Harbor Life doesn’t charge customers any fees, the company makes no similar guarantee about its partner companies.
About Harbor Life
Harbor Life, Corp. is headquartered in Austin, Texas at the following address:
107 Leland St, #1
Austin, TX 78704
You can get in touch by phone at (800) 694-0006. The company describes itself as “a life settlement marketing company” that “will refer qualified policy owners” to various licensed brokers or providers.
Harbor Life appears to be a brand new company. The domain was registered on September 13, 2017.
Harbor Life Settlements Conclusion
Harbor Life doesn’t appear to be a scam. However, the company engages in some annoying and shady marketing practices.
The company’s website features stories of people who earned $220,000 by selling their life insurance policies. There’s also a calculator that seems to exaggerate the value of your expected life settlement. And, by using that calculator just once, you’re giving Harbor Life permission to sell your information to licensed life settlement companies. A line at the bottom of the website also claims that users can expect to get paid “an average of 4 to 11 times more than what they would receive from the insurer for a surrendered policy.”
Harbor Life also frequently claims that it’s a free service with absolutely no fees. However, the company seems to refer you to licensed life settlement companies that do charge fees.
Ultimately, Harbor Life is not a scam. However, they’re not a licensed life settlement company. They just collect your data, then sell it to licensed life settlement companies. They appear to be a legitimate enterprise. However, they’re a brand new company with limited history online (founded in September 2017). And, you may be able to save money by working directly with a life settlement company instead of submitting information through a middleman like Life Harbor. Nevertheless, their website seems to offer easy and convenience access to a network of licensed life settlement providers.
