Abacus Life Gets Onto Nasdaq

Together, the two companies have 83 employees. They have relationships with 78 other financial services companies and about 30,000 financial advisors. They service life insurance policies that are set to pay $950 million in death benefits.

The Life Settlement Market

Jackson, Abacus Life’s CEO, has estimated that U.S. residents now let life insurance policies with $233 billion in policy value lapse every year, and that life settlement firms succeed at buying policies with only about $4 billion in policy value.

He has suggested that life insurance policy cash value could account for about 6% to 8% of the assets of a typical agent, advisor or financial planner’s clients and that many financial professionals have not thought much about that slice of the portfolio pie.

For some clients, who turn out to have savings shortfalls, sales of unwanted in-force policies could help supplement the assets in rainy day funds, 401(k) plans and individual retirement accounts.

Headwinds and Tailwinds

Abacus Life and East Resources said in SPAC deal filings that possible risks include some life insurers’ hostility toward the life settlement market, and efforts by life insurers to use special “enhanced cash surrender value” campaigns to, in effect, buy back policies that they themselves have issued.

One tailwind may be death: Although the overall U.S. death rate has fallen sharply since the peak of the COVID-19 pandemic, it still appears to be more than 5% higher than it was in 2019, before the pandemic started. If the death rate stays high and speeds up life insurance policy death benefit payouts, that could improve life settlement companies’ performance.

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