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Over
the next 10 years, the age 65+ population will increase by 33%. "Baby
Boomers" are aging and they represent the single largest age segment of
the population. They represent the fastest growing and the most affluent.
With more than $492 billion of life insurance in force, the age 65 and
higher population represents an enormous marketing opportunity for life
settlements. The potential supply of life settlement product over the
next several years is in excess of $108 billion. Life settlements will
continue to gain in popularity as aging "baby boomers" turn to these new
financial instruments for additional flexibility in retirement planning.
It is estimated that $1.6 trillion in life insurance face amount is lapsed
or surrendered annually. Based on the relative youth of the life settlement
industry we believe that many of these policies would have been negotiated
as a life settlement with proper exposure. As the financial planning world
becomes more familiar with life settlements it will create a deeper market
and it will become a common financial planning tool.
According to the Conning and Company report, the raw size of the life settlements market is massive. The following table provides a breakdown of individual life insurance in force at the end of 1997.
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Age
Distribution of Policyholders
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($'s
x billions)
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| Product | Amt. in Force | Under 25 | 25-34 | 35-44 | 45-54 | 55-64 | 65 & Up |
| Term | 5,233 | 5.1% | 13.2% | 16.5% | 9.2% | 2.8% | 0.5% |
| Whole Life | 2,623 | 7.6% | 4.6% | 4.3% | 2.7% | 1.8% | 2.8% |
| Universal Life | 2,247 | 4.8% | 4.6% | 4.9% | 3.3% | 1.7% | 1.0% |
| Variable Life | 950 | 1.1% | 2.1% | 3.0% | 1.7% | 0.5% | 0.2% |
| Total: | $11,053 | 18.6% | 24.5% | 28.7% | 16.9% | 6.8% | 4.5% |
