Lucas Siegel, CEO of Harbor Life Settlements, joins Melissa to share how life insurance policies can be used to pay for senior care and living.
The majority of individuals do not realize that they can sell their life insurance, like any other asset, and use the funds to pay for senior living. Through this episode, Lucas teaches us about the different types of insurance policies, how they can be used for more than we realize, and how to find the right partner to help you capitalize on the investment.
Video Transcript
- Hello, everybody, and welcome into "Senior Living Live". My name is Melissa. I hope you're having a wonderful day today. Well, in this video, we are talking about insurance, all the different types of life insurance policies, in an effort to ensure that you're receiving the max benefit of what you happen to have. Lucas Siegel of Harbor Life Settlements is here to help and he joins us as part of our wonderful partnership with ElderLife Financial. Jeff Hudson is here on that end to tell us a little bit about ElderLife Financial and all the ways they can help your loved ones through their senior living journey. Jeff, hi.
- Hey, Melissa. Thanks for having us back and thank you guys all for joining us again. As mentioned, ElderLife is that one-stop shop to help you identify and coordinate all of your private pay resources to pay for Arbor's communities. In a single phone call, we're gonna walk you through all your different options and connect you to experts like Lucas, who's on the call today, to go into more detail about each resource. So if you have any followup questions after today's information, please don't hesitate to reach out to ElderLife. We'll get you connected to the right team and help you pay for Arbor in the best way possible. But without further ado, I'm gonna throw it over to Lucas and let him introduce himself, and I'll bounce off the call. Thanks, guys.
- Thanks so much. Yeah, so my name's Lucas Siegel. I'm the CEO and founder of Harbor Life, and Harbor Life Settlements is a company that helps families understand the value of their life insurance policies so that they can determine whether it's a great way they can use that life insurance policy to pay for care or senior living or any other needs that they would have, and we're excited to be on with Arbor today, because most families don't realize that life insurance is an asset. Just like your house, just like your car, just like the shirt on your back. It's an asset and it's yours. And like any other asset, you can sell that to use the money, today, for any needs that you may have. 90% of life insurance policies in the United States end up lapsing or surrendering because families didn't know that they had another option. It would be like if you had a house and you didn't wanna live in that house anymore, so you foreclosed on your house instead of selling it. It wouldn't make a lot of sense. So Harbor Life is here to help families understand if there is value, resale value, of a life insurance policy, how much that resale value is, and we work with, we've built an online exchange. So I'll just back up a little bit about what is a life settlement. Life settlement is where you have a life insurance policy, then you sell it, you sell the future death benefit, to a third-party institutional investor, think like a bank, a pension fund, another insurance company, and they take over those premiums, they pay your premiums, for the rest of your life. Then you get a lump sum of cash today that you can use for whatever you want. And then, when you pass, they get the death benefit because you have gotten money ahead of time. So our job is to facilitate life settlements for families and evaluate whether it's the right option or whether it's not the right option. We're a legal fiduciary for families, which means that we represent the families, not the funds or the buyers who buy these policies. So we look after your and the family's best interest and we do free appraisals. A lot of people, most people, in the United States are sitting on policies and they have, a, no idea that it had any value, b, they have no idea what the value is, and c, even if they did, they don't know how to sell it or how to create that transaction. So that's what we're the specialists in, and it's an honor to be here to help serve you guys and help any way that we can.
- That was a lot of fantastic information there, and I loved your example about living in a home and then just foreclosing on it, and not even bothering to get the value of it. People don't understand that this is something that they could do with this insurance policy that they've got, and that's why you're here today, so that we can help everybody out there find a little bit of extra cash. Everybody would love that, right? So you talk about these policies, and I'm sure everybody's running right now to go find out what they've got. So what are the different types of policies, term, whole life, hybrid, and what are they? How are they different and how does that affect, maybe, the monetary value that somebody could get from it?
- Yeah, so there's a plethora of different types of policies, and I'm not gonna go into super minutia detail, but I'll give you like an overarching idea of what the policies are. And we have a team of experts that reads these policies all day, every day, because there's so many permutations. So there's term. Term is the cheapest type of policy that you can get, and it's only really a good policy for a term, for a period of time. So you might have a 30-year term, let's say you have a million-dollar 30-year term, and you pay a very little amount every month, and if you were to pass in that 30 years, you'd get the million-dollar payout. After the 30 years, there's two types of terms. There's convertible term and there's non-convertible term. Convertible term means that, after those 30 years, you can turn it into a product that you can continue paying on for the rest of your life. Non-convertible term means, at the end of those 30 years, your premiums are gonna go way up and it becomes a really bad policy. The second type of policy, and this is the most common policy that we deal with on a daily basis, I would say it's 90% of all the policies that we look at, this is called a universal life policy, and it is a very common policy type. This is where you've got a policy and you can pay it a certain amount every month. If there's certain months where you can't keep paying it, you start building up a cash value in that policy, and if you can't pay it one month, you just pay it through your cash value. And what ends up happening is, eventually, if you stop paying premiums for a certain amount of time, your cash value drops and drops and drops and drops, and then you have to pay out of pocket, and that's where a lot of families say the cash value of this policy is zero. I guess I'm just gonna lapse it. What they don't realize is that you can, for certain scenarios, you can sell your life insurance policy for lots of money, even if the cash value's zero. And so that's what we do, primarily, is we underwrite it to look at, it's a misleading term that I think the life insurance companies intentionally created, because people see cash value as zero, oh, my policy's not worth anything, I'll throw it away. That's not the case. So never, never, never lapse a policy without getting someone like us, at Harbor Life, to look at it first, to understand whether there is value. The other one is whole life. So I mentioned that universal life, term is cheap until the end of the term, then it goes way up, unless it's convertible. Universal life, certain amount of premiums every month, but you can pay less as you build up cash value, so you've got a little bit of flexibility. The third is whole life. Whole life is, you've got a standard amount that you pay every single month and it builds up a ton of cash value into that policy, and then, eventually, that cash value creates a dividend, so you'd make like 5% a year on all the cash value that's in that policy, and eventually it's paid up, so you don't have to pay anymore, because you've paid for so long and it's a paid up policy. So we do do whole life, as well, but whole life is not a settlement where it's not a traditional, you sell your whole life policy. It is a loan program. So we have a loan program where you can, if you have $500,000 in cash value, if you were to surrender that policy to get that cash value, you'd get a big taxable consequence, which is terrible. So most families feel like they can't use it. So we have a loan program where we'll actually loan to you that $500,000, collateralized against the policy, so you can use that money now, still keep some of the death benefit, never pay a premium again, and it's a really good tax-advantaged option to access that money in your whole life policy today. It just requires, it requires $150,000 in cash value or loans, preexisting loans, on your whole life policy, and then we can work with that.
- Okay, so we've talked about ways that you can cash out. We've talked about ways that you can borrow against it. Is there anything else that anybody can do right now to get the maximum out of their policy?
- Yeah. If you are over the age of 75 and you have a $50,000 policy or more, or if you think that the life expectancy of the insured is under 14 years and you're under 75, you should get a quote to see what your policy's worth.
- Okay.
- And we do free underwriting. We let people know what we think it might go for in the market, and that's a way. It's not really life insurance if you can't use the money while you're alive. It's death insurance. And our goal, at Harbor Life, is to put life back into life insurance by allowing families to leverage and use those policies today, when they need it most. So if people wanna figure out, how can I use my policy to pay for the best senior living option possible or to subsidize certain medical costs, or I'm just curious what this thing is worth, give us a call. We would love to do underwriting and figure out how to help you, and if it's not in the family's best interest, we're a legal fiduciary, so we'll tell you. And there's never any obligation, either.
- Well, that's great. But my goodness, you need to get a slogan for that. It's not life insurance if it's death insurance, so we want to make sure that you're getting the maximum out of it while you're living it, alive. I just think that that is such an eye-opening statement, just fantastic. You need to get that in a slogan somewhere, because I think it's just so telling. In just a few words, you just told us what this is really all about, and I appreciate you doing that. So now, how would someone go about finding out how much their policy is worth? How do they get in touch with you? How does this whole thing work? How long does it take?
- So you can do, you can call us at 1-800-694-0006 and we'll go underwrite your policy and we'll pick up, we're a team based out of Austin, Texas, and we all love what we do. We all love helping families and we'd love to serve you guys. You can also go on our website, harborlifesettlements.com, and just put in your information, and we'll give you a call. That's the easiest way to do it. The typical life settlement, and this is a terrible answer, and I hate giving this answer, but the typical life settlement can range from two months to six months, on how long it takes, and it, a lot of it depends on, we'll go get medical records for the family. And so if the medical records take a really long time, if the doctor's unresponsive, it can take longer, but we are here to be a liaison and a concierge and a service to walk the families through every single step of the way, and we do all the legwork. We just present to the family what the results might be. The other cool thing, if you think about selling your house, some of you guys have probably seen those billboards that says, "We buy ugly houses," and those people are obviously trying to buy houses for cheap. Life settlements has those types of people, and they're direct buyers. So they're trying to buy it for the littlest amount possible, and that's it. We're the opposite of that. So we've built an online, just like real estate, if you were gonna sell your house, you'd throw it up on MLS, and then all the buyers can see and place bids on your house. We've built the only live life settlement exchange with almost every major institutional buyer in the world on it, and so when you work with Harbor Life, and we've built this from scratch, because it didn't exist, when you work with Harbor Life, we'll underwrite your policy, talk to the family, see if we think it's a good fit, and if it is, we'll throw it up and we'll send it to every major buyer in the world, and we get them to fight against each other. We get them to compete. We like bidding wars. Our favorite words are bidding wars, because it drives up the value for the family. So instead of getting one bid, we had a case in last week that got 50, and it benefits the families, and with the Harbor Life exchange, we're averaging 50% higher offers than the rest of the market average.
- Wow. Like selling a home, you want the highest bidder, to sell that house, and it's the same thing here. I love it. This has been a wonderful interview, and I don't know if we've really touched on insurance in this particular way, but it sounds like you have a product here and a group of individuals who obviously work for this company that know what they are doing and are putting it in terms that really breaks down the minutia and into terms that we can all understand, and for that, I am so appreciative. I know our viewers will be appreciative. Lucas Siegel, thank you so much for being with us today.
- Thank you guys so much and thanks for giving us the opportunity.
- You bet. It was fantastic. Now, if you are watching this and you love this video with Lucas, and you probably should, 'cause he gave you a lot of great information, you'll wanna head on over to our website. It's www.seniorlivinglive.com, and you can find videos just like this one, all about senior living, from great professionals just like Lucas, and the best part, guys, it is free. We thank you so much for being a part of "Senior Living Live". Have a great day, everybody.
