A life settlement occurs when some sells their unwanted or unneeded life insurance policy for an immediate payment. What happens when the life insurance policy was unwanted or unneeded to begin with? By now, most are familiar with STOLI transactions which have come under immense public, regulatory and statutory scrutiny. However, policy flipping in which someone with an insurable interest buys unneeded life insurance for themselves or loved ones with the intent of selling it in a life settlement has garnered much less attention.

As evidenced by the 13% decline in the Amrita Life Settlement IndexÔÇÖs February results, the life settlement industry still maintains a precarious posture. While a number of life settlement industry insiders have gone on record saying there will be a recovery in 2010, most agree it isnÔÇÖt here yet. WeÔÇÖve seen the industry recently shudder with the news of Goldman SachsÔÇÖ departure from life settlements.

The Amrita Life Settlement Index has garnered more attention than anyone here at Amrita Financial ever imagined it would. Our goal was to create a tool that could be used by all market participants, such as policy sellers, financial advisors, life settlement brokers, life settlement providers, investors, etc., to more effectively understand the life settlement marketplaceÔÇÖs posture. It has certainly provoked thought and stirred conversation thus far.

The life settlement industry is off to an interesting and somewhat surprising start in 2010. Mixed signals make it difficult to get a clear indication of the direction the life settlement industry will take in 2010. The recent exit of Goldman Sachs Group Inc. from the life settlement arena gave the entire industry reason for pause. Goldman Sachs has long been an influential player in the industry and its departure leaves more questions than answers.

The life settlement industry has long been admonished for its lack of transparency. Since the industry lacks a true centralized exchange transactional reporting and accurate data for the overall life settlement industry is anecdotal at best. Obviously some states such as Montana and Texas have reporting requirements for life settlement brokers and life settlement providers.

2010 will hopefully bring a healthier and more robust year than 2009. We are frequently asked from consumers, life settlement providers and financial services insiders what we are seeing in the life settlement marketplace. "What is the color of the market?" seems to be a frequent chorus. To illustrate the observations we've made and prognosticate a bit, we are listing our top ten life settlement predictions for 2010. In no particular order, they are:

In my last post, I talked about some of the factors currently weighing on the life settlement industry. A smaller pool of buyers, increased regulation and longer life expectancies just to name a few. However, with this post we will explore the real world implications of an industry with less buyer activity and conversely how the consumerÔÇÖs expectations are factoring into the equation.

After a bleak 2009 in the financial services industry many are looking to the dawn of 2010 filled with renewed optimism. This certainly holds true for the life settlement industry as well. While weÔÇÖve seen a number of indicators that buying activity is poised to strengthen in the life settlement industry this year, it looks to be a measured and incremental return of activity rather than an exuberant return.

This life settlement blog posting is a copy of our posting which recently appeared on Technorati. Just in case, any of you missed the popular technorati article, we are making it available here through our blog since it has valuable insight into today's life settlement market.

Life settlement broker commissions are often a hot topic in the life settlement industry. A common question that comes up is ÔÇ£doesnÔÇÖt it take the same amount of work to sell a large policy as it does a small policy?ÔÇØ Which inevitably leads to the question, ÔÇ£well then shouldnÔÇÖt the brokerÔÇÖs commissions be reduced for the larger policies?ÔÇØ First, a shameless plug for Amrita Financial - All of our commissions are essentially reduced with our direct to consumer model since we refund half of the commission amount to policy sellers. That not withstanding, lets apply the question to traditional bricks and mortar, life settlement brokers.