With the evolution of the secondary market for life settlements, Scott Willkomm, CEO of mortality-linked products for J.G. Wentworth, suggests bankruptcy trustees consider these three points:

First, the life settlements market is no longer focused only on the high net worth market, with policies in the $1 million and up range.

Second, selling a policy is no longer a difficult and time consuming process, and no medical exam is required

Finally, the life settlement market has become much broader through enhanced regulation by the states, the proliferation of standard industry business practices and capital from major institutional investors.

"Before the development of the life settlements industry, few trustees looked to the value of existing life insurance policies to maximize the value of the bankruptcy estate," Willkomm added. "That perception is changing rapidly with the development of these new tools for monetizing the value embedded in life insurance policies."

Willkomm pointed out some areas of interest for bankruptcy trustees:

The secondary market for life insurance is a highly specialized market, and the ultimate determinant of an individual policy's value is how effectively the sale process is managed.

Contact a reputable buyer of life settlements to get a fair assessment of the value of a life insurance policy.

Knowing the determinants of value that drive pricing in the secondary market for life insurance is beneficial for seeking to identify special situations when valuing a policy.

The sale of a policy and committing the proceeds for the benefit of his creditors may provide a debtor with a way to retain or preserve unrelated, non-exempt asssets.