Those who are older in age may find themselves needing funds for their retirement, medical bills, and more. While there are certainly many ways to secure funds, those who have exhausted their options may want to consider a final resort called a life settlement. A life settlement is a transaction where one sells their life insurance policy to a company and in turn, they receive more than the surrender value of the policy, but less than the death benefit. The value of one’s overall life insurance policy can vary depending upon a number of factors. To make the right decision, it is best to receive offers from multiple companies so that individuals can receive the most for their policy.
While there are many companies, this review would like to discuss Magna Life Settlements.
What Is Magna Life Settlements?
Magna Life Settlements is a life settlement company that claims to be “one of the largest life settlement providers in the industry.” Unlike many life settlement companies, Magna Life Settlements works directly with those selling their policies. In addition, the company also claims to work with investors as well. This could lead to competing interests and this factor is something that individuals who are interested in a life settlement should be aware of.
Further, those who visit Magna Life Settlement’s website will notice the formal tone of the website. Dissimilar from most life settlement companies, there are no images of smiling elderly individuals or other gimmicks. The website is clean, straightforward, and it may have some positive qualities as well that make it into a viable solution.
Strict Compliance With Regulatory Boards
One of the most interesting aspects of Magna Life Settlements is that its website focuses on the company’s compliance with regulatory bodies and it even names the organizations as well. For example, the company explains that it is a board member of organizations such as the Life Insurance Settlement Association (LISA), Institutional Longevity Markets Association (ILMA), and the International Security Markets for Life Insurance (BVZL).
Most of these organizations oversee the life settlement industry, they educate consumers, advisors, and professionals in the life settlement industry. It is possible to infer that because of Magna’s participation in these organizations, the company is likely a legitimate entity that truly does strive to perform its functions in a fair manner.
Highly-Educated Employees
Very few life settlement companies divulge the professionals in the business. In this case, Magna Life Settlements is very transparent. According to the company’s website, its business is comprised of 18 employees who have a century of combined industry experience. Additionally, those who work for the company have law degrees, MBA’s, insurance licenses, and a CLU and ChFC. These types of educational standards may suggest that the company truly strives to be in compliance with industry standards and to work for the benefit of both the policy holder and the investor.
It is also important to note that the company has been in the industry since 2004. In 2010 the company was acquired by Vida Capital Inc., an asset manager.
Magna Life Settlements Serves Three Entities
There are three different groups that Magna Life Settlements serves: policy owners, agents and professionals, and brokers. The company works to collect life settlement policies from various groups of people to add to its investment portfolio. Those who sell their life insurance policy to a life settlement company may find its end home to be Magna Life Settlements – and if anything, this company simply reflects the need of individuals to truly do their due diligence by questioning what will happen to their life settlement policy. As in, whether the life settlement company will keep the policy or sell it off to another entity such as Magna.
Magna Life Settlements For Policy Owners
Those who are policy owners can directly reach out to Magna Life Settlements to sell their insurance policy. When selling their policy, it is likely that they will receive more than the cash surrender value of their policy, but less than the death benefits. Here are the main features of a life settlement with Magna – albeit, very simplified:
Seller Receive Cash
In exchange for one’s life insurance policy, the policy holder receives a cash payment. While the company does not delve deep into this factor or the others, it is important to note that the receipt of cash payment can take time and it is possible that the funds will be held in escrow until it is completely verified that the policy has been transferred to the company. It really isn’t as quick or as easy as receiving a cash payment.
Buyer Pays All Future Premiums
Second, the company mentions that the buyer pays all of the policy’s future premiums. This is a promising feature because some companies refuse to pay the premiums. It is best to discuss this in depth with the company by questioning when their payment of premiums will start, how much of the premium they pay, and if the premium payments may somehow revert back to the policy owner.
The Buyer Receives The Death Benefit Upon The Death Of The Insured
Finally, once the insured passes away, the company will receive the death benefit. This means that the previous beneficiaries of the policy – such as family members, will not receive anything from the life insurance policies. As a result, it may be helpful to make provisions for loved ones regarding final life expenses. Also, keep in mind that the value that one receives for their life insurance policy may be significantly less than the death benefit – therefore, one is giving up funds by entering into this transaction.
This is the process highlighted on the company’s website and as mentioned, it certainly is a simplified version. For example, the actual initial step in the process is assessing whether one is even eligible for a life settlement with the company. If one is eligible, the company will continue to assess the value of the policy, it will provide an offer, and only upon acceptance of the offer, will the transaction take place. As individuals can tell, there are many stages before the seller actually receives cash for their policy.
Online Application And Medical Pre-Screen
To help facilitate the process, the company offers an online application and medical pre-screen resource on its website as well. The application is fairly simple and it requires one to provide information such as their name, date of birth, address, contact number, insurance company, policy number, whether it is a group or individual policy, the type of policy, and the reason that one is considering a life settlement by selling their policy. The application is straightforward and upon completion, individuals are prompted to submit the application to the company – the email is on the application form.
The second available form is the medical questionnaire. The questionnaire further asks for personal information and it also questions whether one is a smoker, whether one consumes alcohol, whether there are any health conditions, and if one had surgery recently or in the past. Just to provide some insight – it is best to be as honest as possible in answering these questions. Life settlement companies are often looking for individuals who have a short life expectancy because it means that they’ll receive a faster return on their investment and they may also need to expend less on premiums. Thus, if one truly is ill or drinks or smokes, then mention it in the application. Doing so may increase the value of one’s life insurance policy to the purchaser.
Finally, after exhausting the first two steps, individuals can also request a medical interview by filing out another form as well. The medical interview is not a common practice among life settlement companies – but it may just be that here, the company is looking to fully assess an individual’s health and to ensure that it is a worthwhile approach for them.
Magna Life Settlements Licensing
One of the most important qualities to look for in a life settlement is that the company is licensed. Magna mentions on its website that it is “expected to be licensed during this calendar year” in Delaware. Meaning, the company is not yet licensed in states that require licensing. Therefore, it is best to wait until the company receives its license so that individuals can ensure that the transaction is compliant with state and federal laws.
The good news is that it is licensed in the states that do require licensure. For example, those who visit the brand’s website can view a chart of all of the states where it has a license. Further, the company is able to do business in 40 states. Those who live in California and New Hampshire and who do transact with Magna Life Settlements or any other life settlement company should be aware that the company is legally required to inform policy holders that they should consult a licensed insurance or a financial advisor is considering to sell their life insurance policy. These steps safeguard one’s interests and ensure that one is protected.
The Factors Magna Life Settlements Considers For Eligibility
As previously mentioned, not everyone is eligible for a life settlement and there are a number of factors that the company considers in assessing eligibility. In this case, here ae the main factors that Magna Life Settlements takes a look at:
- Age
- Health Status
- Type of Insurance
- Death Benefit – the face amount of the policy
- Policy premiums
- Date of issue
- Type of ownership
- Carrier
These factors vary from person and not everyone qualifies. But, for those who do qualify, it is important to safeguard one’s interests by being as diligent as possible. For example, individuals are encouraged to do their research, to assess their options, and to fully determine whether a life settlement is right for them.
Pre-Qualify A Policy
Individuals can pre-qualify a policy as well. The pre-qualification as well enables individuals to perhaps speed up the process if that they are certain that Magna Life Settlements is right for them. This process entails entering in one’s personal information into the pre-qualification form, their age, gender, health, and information about their policy. Upon being pre-qualified, users will receive call from an agent so that they can continue with the steps. While pre-qualification is certainly a good option for those who are looking to receive a life settlement quickly, it is still recommended that individuals check out their other options with various life settlement companies. In doing so, individuals enhance their chances that they’ll receive a fair rate for their policy.
The Benefits Of Magna Life Settlements
There are a number of benefits to be had when one chooses Life Settlements. While these are certainly not determinative factors for choosing this company, they certainly may help one who is assessing their options and who wants to make the right decision:
Compliant With Licensing And Industry Regulations
First, those who visit the company’s website will find that it adheres to compliance in terms of licensing and industry regulations. These features suggest that it is a reputable company to work with. Very few companies are as upfront as this one when it comes to compliance.
No Frills
Second, the company’s website is largely devoid of frills and while it may be because the company is also catering to investors, it also suggests that it is in the business of providing service and care to those who it works with – including sellers.
Licensed
Finally, the fact that Magna Life Settlements is licensed, it provides information on its licensing, and it is compliant in nearly all states, but one, does help one feel confident that it is a positive company to work with.
Magna Life Settlements Summary
Ultimately, those who are interested in getting started with Magna Life Settlements can do so by visiting the company’s website and contacting one its of agents. The contact information is on the website and individuals can fill out the necessary forms as well to get started. Keep in mind that this is just one company out of the many potential options on the market, therefore it is best to get an offer from here and to also receive offers from other businesses as well so that one can pick the best one.
