White's "hot' pitch

FEB 12, 2012
Betty White, America's favorite Golden Girl and star of TV's “Hot in Cleveland,” is now hot on life settlements. The actress has signed on as celebrity pitchwoman for The Lifeline Program, a life settlement provider, and stars in the firm's YouTube video “I'm Still Hot,” which features her break dancing and sitting on a throne, surrounded by scantily clad muscle men. In life settlement transactions, an investor buys an in-force life insurance policy for a fraction of the policy amount. The policyholder receives the cash, and the investor pays the policy's premiums until the insured dies, when the investor collects the death benefit. Ms. White's pitch may fall on receptive ears. In a recent phone poll of 356 baby boomers conducted by International Communications Research Inc. and commissioned by Lifeline, 79% said that financial planners and insurance agents should disclose that life settlements are an alternative to letting a policy lapse by ceasing premium payments. About a quarter said they would consider selling their policy to help pay for retirement. “Many people didn't know that selling their life insurance policy was even an option,” said William Scott Page, chief executive of Lifeline.

A GOOD DEAL?

But at least one advisory firm executive isn't so sure life settlements are a good deal. “The lack of credit and liquidity in the market has made the offers [for policies] unattractive,” said Rita Robbins, president of Affiliated Advisors Inc. “Advisers realize that selling isn't as lucrative as it once was. The extension of life expectancies has also had a huge impact on the amount people are being offered.” A recent flurry of bad press, including the Securities and Exchange Commission's charges against life settlements provider Life Partners Holdings Inc., also has dampened interest in the secondary market, she said.

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