The Truth about Sustainable Investing: Unveiling Myths with AIR Asset Management

The Truth about Sustainable Investing: Unveiling Myths with AIR Asset Management

As the dawn of a new era breaks in the financial world, sustainable investing has gained prominence, becoming a pillar of modern investment strategies. Moving beyond the profit-centric mindset, this approach incorporates environmental, social, and governance (ESG) principles into investment decision-making.

One area that has gained traction within sustainable investing is life settlements – the sale of an existing life insurance policy to a third party for a one-time cash payment, usually more than the surrender value. This allows policyholders to access the capital locked in their life insurance policies for immediate financial needs.

Yet, although life settlements have shown the potential to strike the perfect balance between financial gain and social good, becoming a win-win solution for policyholders and investors, the sector has been riddled with certain myths and misconceptions that have held it back somewhat.

Myth 1: The Emotional Quagmire

Richard Beleutz, the CEO of a life settlement and longevity-related investment strategies firm,AIR Asset Management, reveals that one of the biggest reasons this asset class has been misunderstood is that it deals with an emotionally charged topic – death.

“This has led to some misinterpretations that agents want to profit from people passing away. It’s a susceptible subject, and I can understand why some feel weary about it,” he says.

But Beleutz maintains that the sector’s reality is far from this bizarre idea of exploiting death. Instead, he shares that life settlements offer a unique proposition that reverses the traditional life insurance model.

“Instead of solely providing benefit upon the policyholder’s death, life settlements provide policyholders themselves with value while they are still alive. This is especially important for seniors, many of whom struggle financially,” Beleutz explains. “Since it allows them to sell their life insurance policies at any time, they can meet their healthcare costs or improve their quality of life.”

In essence, life settlements empower individuals in their twilight years, providing them with financial independence and the means to live their lives with dignity and comfort.

Myth 2: The Pushy Salesman Stereotype

Another myth that has plagued the sector is the ‘pushy salesman’ stereotype, an image that can deter potential customers. Rooted in past aggressive tactics, this stereotype has spilled over into people’s perception of the industry.

Beleutz reveals that the reason behind this unfortunate reality might be the once relatively low barrier to entry to become an agent. Still, he highlights that the industry has evolved significantly, with an increasing focus on consumer protection and transparency.

“As professionals, we’re committed to consumer rights and their satisfaction,” he says. “There’s an extremely low incidence of complaints related to life settlements.”

Myth 3: The Questionable History

Like many sectors in its infancy, life settlements had their share of growing pains. In the early days, there was a lack of regulation and oversight, leading to questionable practices and tarnishing the industry’s reputation. This has given rise to the myth that the industry’s history is riddled with dubious activities, casting shadows on its credibility.

Beleutz emphasizes this narrative needs to acknowledge the remarkable transformation over the years. Today, as he says, the market is far removed from its earlier state.

“Life settlements are regulated in some form in 44 states, making it a highly regulated industry. With clear tax laws and extensive case law, the sector has matured into an institutional space offering great certainty,” he states.

Myth 4: Commission-Driven, Not Consumer-Driven

The life insurance industry has often been viewed as commission-driven, a perception shaped by the high commissions that life insurance agents can earn.

“This has led to instances where policies were sold to individuals which may not necessarily have been in their best interest because of the motivation for a large commission by an unscrupulous agent,” Beleutz says.

But, while it operates within the broader context of life insurance, the life settlements industry stands in contrast to this perception.

Its focus is not on selling new policies for commissions but on unlocking the actual value of existing guidelines for seniors – tying back to its ability to allow policyholders to feel financially secure and optimistic about their futures.

As the financial world moves forward with sustainable and responsible investment conversations, the dual nature of life settlements—financial returns and social benefits— positions them well within this discourse.

Indeed, consideringBeleutz’s insights, embracing life settlements as a part of a balanced, diversified, and socially conscious investment strategy feels like a path genuinely worth exploring.