Speak to almost any participant in the life settlement secondary market, and they will tell you that increasing the awareness among American seniors that the life settlement option even exists is both the industry’s biggest challenge – and its biggest opportunity.
Individuals, companies, and industry groups all have initiatives underway designed to contribute to the rising tide of awareness that would lift all boats, but Washington, D.C-based Life Insurance Settlement Association (LISA) has recently supported an endeavour that could end up being shortlisted or nominated for an Academy Award – or even win one.
LISA provided funding to support the production of Cashing Out, a documentary from New York-based filmmaker Matt Nadel that tells the stories of three people who had a direct link to the viatical settlement industry in the US in the 1980s and 1990s – the beginnings of the industry that has evolved into what is now the life settlement market.
Viatical settlements arose in the 1980s as a vehicle to offer financial relief to AIDS patients who had lost income or required funds for end-of-life care. Life insurance policyholders could sell their policies to investors for an immediate cash payment, while investors took over premium payments and received the death benefit upon the insured’s passing. This arrangement provided much-needed financial relief to those with terminal illnesses and created new opportunities for investors.
The genesis of the film lies in Nadel’s own personal connection to the market – his father was an early investor in the space, something unknown to him until the beginning of the Covid-19 pandemic.
“I was on a walk with my dad around the time when people really began to talk about a potential Covid vaccine and I said to him that it’s obviously great news, but it makes me feel weird that there are pharma companies making so much money out of this. My dad responded a little defensively and then he told me all about him being an investor in viatical settlements in the 80’s,” he said.
“I had never heard of this, so I went down the rabbit hole. Was it good? Was it bad? Who to believe? What to think? When I did the interviews with people impacted by the industry and hearing their stories, I realised there was a film here because of the nuance and moral complexity.”
Nadel subsequently began researching, watching old videos, including an episode of popular US daytime talk show Donohue, which featured longtime life settlement industry participant, and former LISA board member, Scott Page.
Page features heavily in Cashing Out, which explains how and why he first got involved in the viatical settlement market – and subsequently launched his first firm, Page & Associates, which brokered transactions between policy sellers and investors.
Page said that when Nadel first approached him, he was a little sceptical but warmed up in the end; additionally, getting LISA involved made a lot of sense.
“This wasn’t the first time I’ve been approached to participate in a documentary. The first two times I turned them down – I felt they were trying to create a gotcha piece. But when Matt approached me this time, I agreed to a Zoom call, and after an hour I saw his passion and empathy and I felt safe that this was the right time and the right person for me to share what was a personal, intimate and controversial part of my life,” he said.
“In terms of asking LISA to get involved, I felt that it was important for the Association to embrace its origins, and I felt it was – and is – a wonderful opportunity for LISA to show their philanthropic side.”
LISA’s involvement is not exclusively philanthropic in nature. The aforementioned awareness topic in the life settlement market is perpetual. Industry group the American Council of Life Insurers (ACLI)’s annual Life Insurance Fact Book provides lapse (where the policyholder stops paying premiums) and surrender (where the seller opts to surrender the policy for its cash value) – rates for the previous 12 years. The combined rate jumped to 8.5% in 2023 from 6.7% in 2022. Those percentages represent billions of dollars of potentially lost economic value had the policies been sold into the life settlement market.
So, LISA, and the broader market, will be hoping that Cashing Out provides something of an awareness boost for the life settlement industry. And the boost could well be significant.
Cashing Out has already qualified for consideration in the ‘Best Short Documentary’ category (documentaries 40 minutes or less) at the 98th Academy Awards. The requirements for consideration include the need for the film to have been publicly exhibited for paid admission in a commercial motion picture theatre in at least one of six US cities (Los Angeles, New York, Chicago, San Francisco, Miami, or Atlanta) in a theatrical run that lasts for seven consecutive days and that is publicly advertised. The next notable development will be the announcement of the shortlist, which is scheduled for Tuesday, 16th December.
The nominations are announced on Thursday, 22nd January and the winners themselves on Sunday, 15th March.
In the meantime, Nadel will be taking Cashing Out to larger cities across the US, before embarking on a tour of universities.
“Young people have responded well so far to the story of the epidemic; me as a kind of portal to this industry gave them a more personal entry point to understand what was going on in the 80s and 90s. I hope this will spark an intergenerational transfer of this knowledge so that young people become the guardians of this knowledge. If history shows us anything, it’s that we need HIV-knowledgeable leaders in finance and business so that we can build a more HIV-inclusive society,” he said.
If Cashing Out were to be shortlisted, nominated, or even win the Academy Award, it would likely make a big difference for Nadel. After all, the Oscars provide directors and producers with much more visibility, helping them to secure financing for future projects easier.
But what would it mean for the life settlement market? And how can LISA measure success?
“LISA is proud to support the documentary Cashing Out because we believe it will bring much-needed awareness to the life settlement industry” said Bryan Nicholson, Executive Director at LISA.
“This film shines a light on the real, meaningful impact life settlements can have on people’s lives; whether that was an AIDS patient in the 1980s trying to afford end-of-life care or a senior today who desires to retire with dignity. Life settlements can change people’s lives for the better and it’s important that more people know this option exists.”
As a former market participant, Page knows about the awareness challenge all too well but hopes that the film reinforces the original concept of the viatical settlement market – one of dignity.
“The consumer awareness portion has always been a challenge. My firm partnered with Betty White as our spokesperson for over a decade, trying to provide consumers with education about options with their life insurance policies in ways that do not confuse them. But I hope that my involvement with LISA and this film can help the industry to also focus on the dignity component of these transactions. I don’t want the industry to leave behind smaller clients with smaller insurance policies – these are the people that the market was originally set up to help.”
Nadel himself admits that he had a view of the viatical settlement market that skewed towards the negative when he embarked on the journey to what would eventually become Cashing Out but now feels differently – albeit with a little sense of ‘what if’.
“My view definitely changed. [A negative reaction is] how most people respond when they hear of an industry like this; they hear words like ‘AIDS and ‘life insurance’ and ‘profiteering’ but I realised through the process and by speaking to my dad and all these folks impacted by it, just how much it benefited them. And then, for those who didn’t have access, how much they wish they did,” he said.
“Dignity in vulnerable moments is something we all want and deserve. If anything, I hope this film serves as a portal to understand what happened and understand that dignity does have a cost. In the US we live in a system that places a price on people’s dignity and sometimes prices them out of this dignity. Solutions like this one can be helpful to people in terms of not having their dignity taken away.”