Pinoy New Era Of Investment

Don't lose your money in stocks!!!...

There are two parties involved in every Life Settlement (LS, LSs is plural): LS is the same as and is often called a "Senior Settlement", A Seller and a Buyer.

The Seller is always the owner of an existing life insurance policy who is terminally ill or a senior citizen (65 years of age or older). The price of the policy is negotiated and sold to the Buyer at a price that is less than the death benefit, but more than the cash surrender value. Sellers receive an immediate cash payment to use as they desire. The Buyer/New Owner/New Beneficiary (really an investor who bought a life insurance policy for profit) collects the full death benefit when the policy matures.

Life Settlements from the Viewpoint of the Seller

The easiest way to understand the great economic advantages of Life Settlements for the Seller is to look at a real life example.

EXAMPLE

“Let’s look at a scenario involving a 77-year-old female who owns an insurance policy with a Php 900,000 face amount and a current cash surrender value of Php 68,296. Karen Cruz originally purchased the policy for estate planning purposes. Since both of her children are now married and financially secure, she believes she no longer needs the policy and has no desire to continue paying the premiums. Mrs. Cruz CPA suggests she sell the policy to a life settlement.

After working with her accountant to select a provider, she receives Php 314,735 for the policy - an economic gain of Php 246,439 over the cash value she would have received from simply surrendering the policy [to the life insurance company].”



What the Life Insurance Companies Don’t Want You to Know?

Think about it. In the above example, if Karen Cruz was not able to complete her LS and receive Php 314,735, she had only one other choice: surrender her policy to the issuing insurance company for the Php 68,296 cash surrender value. Until the LS industry was born, the insurance companies had no competition.

Policy owners had no choice… It was cash surrender value or nothing. Nice for the insurance company: Pay a mere Php 68,296 and walk away from a Php 900,000 death benefit obligation. As you can see by the Php 314,735 Karen received from the LSP, she was able to share in part of the profit the insurance company wanted to keep.

One problem … very few people (including professionals like CPAs and lawyers) even know that the LSP industry does exists; or have they heard of LSs. The life insurance industry would like to keep it that way. Why? … Well, as you are about to learn in this blog, it is profitable to know about a properly structured LS transaction. The transaction can be advantageous to both the buyer and the seller. Can’t blame the insurance companies for keeping LSs secret (by not notifying their policy holders that they have an option). Simply put, the insurance companies would like to keep all the profits.

Now that you know this well-kept insurance industry secret, you are ready to learn how easy it is to share in the potential profits - by investing in LSs. Let’s start by looking at another investment that is a kiss’n cousin to LSs.

Is There Any Other Investment That Is Similar to a Life Settlement?

Yes… zero coupon bonds.

Zero coupon bonds do not pay interest during the life of the bonds. Instead, investors buy the bonds at a discount from their face value (the amount each bond will be worth when it “matures” or comes due). When the bond matures, the investor receives one lump-sum amount, which includes the initial investment plus accrued interest.

The maturity dates on zero coupon bonds are usually long-term. Many don’t mature for 10, 15, or more years. Because zero coupon bonds pay no interest until maturity, their prices fluctuate more than other types of bonds.

You can purchase different kinds of zero coupon bonds that have been issued by a variety of sources: including the Government Treasury, corporations, and local governments.

EXAMPLE

On March 1, Pedro calls his broker to buy a Php 100,000 (face) zero coupon bond issued by the Philippines Treasury that has about three years to maturity. The broker finds such a bond that will mature (it was originally issued about 12 years ago) in 38 months. The price is Php 78,500 (a discount of Php 21,500 from the face amount – Php 100,000 - due at maturity.)

Pedro buys the bond at its market price, Php 78,500.
Fast forward to the bond’s maturity date 38 months later. Pedro gets exactly Php 100,000: (1) the return of his principal (Php 78,500), and (2) his profit (really the Php 21,500 discount).

As you will soon see, Pedro’s buying, then holding the zero coupon bond until maturity (except for the zero coupon bond profit guarantee) is similar to a LS transaction.


INCOME TAX EXCEPTION

Too bad, but Pedro must pay income tax on his accrued interest (even though he doesn’t get it for 38 months) each and every year. For example, Php 5,659 (10/38 of Php 21,500) in the year he bought the bond is taxable income and Php 6,789 in each of the next two years. In the final year, when Pedro receives the entire Php 100,000, he will pay tax on only Php 2,263 (the balance of the Php 21,500 profit).

Indeed, Life Settlements and zero coupon bonds share a number of common traits. But there are two significant economic differences that favor Life Settlements:
The discounts are much deeper for LSs, resulting in a significantly larger potential profit for each money invested, and
No income tax is due on any LS profit until the day you receive back the full amount of your investment, plus any profit.

Are Life Settlements Too Good to Be True?

"The most common question (or some variation) was, "How is this possible?"
Both - the "Too good to be true" quote and the "How" question deserve some answers. So, here goes: First, a little background about the life insurance industry before dealing with the quote and question above.

There are basically two types of life insurance: permanent [has cash surrender value (CSV) and term (no CSV)]. According to an international actuarial firm, 89.5% of Life policies never result in a death claim. The policies are either surrendered, or worse, allowed to lapse.

And what about term insurance? ... These facts are, although true, almost unbelievable: According to Tax Planning with Life Insurance, "Ten years after issue, there is only a 15% probability that a term policy will be in force at the insured's death. There is a less than 2% probability that term insurance bought twenty years before an insured's death will be in force. So, on average 93% of all life insurance policies sold in the market never pay even Php 1.00 in death benefits.

Amazing!

Long story short, Life Settlements to the rescue. However, before the LS investment opportunity, as disclosed in this report became available, Life Settlements were the sole profit playground of the institutional investor: large companies with deep-cash pockets. For example, Warren Buffet's Berkshire Hathaway has been in the life settlement game for about 15 years and announced in 2006 a $400 million loan to a new wholly owned subsidiary to invest in life settlements.


A BIT YOU SHOULD KNOW ABOUT THE LIFE SETTLEMENT INDUSTRY

Now, let's connect the dots. Stop for a moment. Think about it. Life insurance companies deposit premium money year-after-year and about 93% of the time they keep all of the money, while the insured or his/her heirs get nothing in return. One exception, the policy owner terminates the policy by getting back the CSV. Life Settlements simply allowed (and still allow) the large institutional investors to step into the profit shoes of the insurance company.

When we think of deep-pocket institutional investors earning in excess of 15%, we kind of shrug our shoulders and think of the old cliché, "Money goes to money." For those fat cats it's not thought of being "too good to be true." Nor do we have much interest in, "How did it happen?" Of course, now you know how it happens: the insurance company profits, because the 93% of death benefits are not paid. (in effect) – The large rate of return earned by institutional investors transferred to the Life Settlement investor.


THE RESULT FOR THE "LITTLE GUY"

Simply put the 93% termination rate of life insurance policies in the market which paves the road that makes Life Settlements a growing industry and opens the profit potential to all investors: including the little guy.

Life Settlements are the bridge that allows the little guy – with the help of my service – to get into the potential profits of the life settlement game - right next to the Institutional Investor.

A Few Words About the Stock Market

One thing for sure, the stock market is liquid. Liquidity attracts investors like honey attracts bees. It is estimated that two out of every three Investors - own a piece of the stock market.

The stock market is a mixed bag. Fortunes have been made (mostly by professionals). Unfortunately, saved-for-a-lifetime-retirement funds and nest eggs have been decimated (mostly by amateurs).

It’s sad but true: When adding up the stock market’s profits and losses, the professionals “makes”, and the amateurs “gives.”

But along with liquidity, the stock market on a day-to-day basis brings great uncertainty (spelled “R-I-S-K”). But the reward over the years - on average - easily exceeds the small returns of the popular conservative alternative investments (i.e., CDs/annuities/municipal bonds).


Over the past 30 years, the stock market has averaged just a bit less than a 9 percent annual rate of return. Not bad!

COMPARED TO LSs
LSs are not designed to give you sky-high annual returns. But the plain fact is that LSs have had a historical average rate of return of 13%-15% for 15 years beating the stock market averages by almost 7% per year. Past performance cannot guarantee future results.

A 75% better return than Wall Street’s average… without being subject to the ups and downs of the market.

Interesting, isn't it?


NOW, THE REAL QUESTION

Would you be willing to give up the liquidity of the stock market and its possibility for a high rate of return for a boring LS investment? That also has the possibility for a high rate of return?
Only you can answer these questions.
But first, you must change the way you think about investing your hard-earned money.

Change Is Either Your Greatest Ally and Friend or Your Worse Enemy - You Decide

Yes, our world - particularly our investment world - has changed, is changing now and will continue to change… at least for the foreseeable future. LSs are your unique investment that can successfully help you adapt to these changes.

Empower yourself to recognize the current changing and uncertain investment landscape. Take full advantage of the LS wealth-building opportunity … Not only for yourself…but your family as well.

You must decide between mentally changing and investing for success.

Is the Senior Life Settlement Program investment safe?

Yes. Choose only best "A" (or above) rated insurance companies to assure the safety of your investment. Historically, the life insurance industry has been the most economically stable business. With virtually no defaults by any "A" rated insurance company in over 100 years, you can be certain your investment is secure. Most policies also have a guarantee by the legal reserve fund. If the company fails, the contracted death benefit would be paid to you by the government.

Need to know more about the details of life settlement? email: towermcs@gmail.com