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Overview

Mason Finance is an online financial services platform designed to improve the financial health of people in America over the age of 65. While half of all seniors are economically insecure, over one million of them lose $112 billion in life insurance wealth each year by allowing unaffordable policies to lapse instead of selling them. Mason Finance’s first product seeks to turn one of America’s largest wealth losses into one of its largest wealth gains.

Their Story

Aging Americans are a growing population, making financial struggles in retirement an ever-pressing issue. Nearly half of Americans have no retirement account savings at all, according to Economic Policy Institute data. At the same time, every year Americans over the age of 65 lose $140 billion a year in lapsed life insurance. The main culprit? Expensive premium payments they can’t keep up with.

For Felix Steinmeyer and Charles Mourani, co-founders of Mason Finance, Inc., a licensed life settlement buyer, the widespread issue facing aging Americans represented a massive unmet market need. Steinmeyer and Mourani, who met while studying at Stanford University, first started working together on a very different business plan two years ago. They created an online platform where people could resell their jewelry and quickly discovered that older women were the main demographic they attracted to their platform.

“There are a lot of misconceptions about seniors. They are extremely good online. Seniors value a good experience, and they are some of the most serious customers you can have,” Steinmeyer says.

If seniors were going online to make some extra cash, what other ways could technology reach them that would make a real difference in their financial lives? In their research, Steinmeyer and Mourani realized just how much money people were losing on lapsed life insurance policies. What if they could create an easy and automated way for people to take advantage of life settlements that allowed them to access cash quickly and safely?

A life settlement allows you to sell your life insurance policy to a third-party investor for a lump sum in cash. As a result, the investor becomes responsible for paying your monthly premiums and becomes the beneficiary of the policy once you die. While not a new practice, getting a life settlement has long been a tedious and expensive process, involving a number of third-party players, lots of time, and lost money.

“When there is a sudden expense, insurance premiums fall on the back burner,” Steinmeyer says. “People don’t realize these policies can be exchanged on the secondary market for a lot of value.”

The average amount people get for their policy in a life settlement is 25 percent its face value, which can amount to thousands of dollars for seniors who have been paying life insurance premiums for years. For anyone over the age of 65 struggling with life insurance premium payments or facing a sudden big expense, a life settlement creates access to money without having to sell your home or fall into financial ruin.

“Anybody who is faced with a big unexpected expense should consider selling,” Steinmeyer says.

Often what people don’t realize until it’s too late is that when they lapse on their policy, they not only lose their life insurance coverage, but also lose all the premiums they paid over the years. That is where life settlements come in.

“If you sell your policy, you get a lump sum of money for the premiums you already paid and you no longer need to pay them each month,” Steinmeyer says.
To make this possible, Mason Finance had to figure out a way to streamline the process of selling policies through automation and get the proper licensing to be able to complete those transactions themselves. Traditionally, people looking to sell their policies need to deal with a slew of middlemen, each of who takes a cut along the way. What’s more, the process can take up to six months to complete, involving around 100 different touchpoints, Steinmeyer says. To simplify the process, Mason Finance collects all the necessary information and manages it online.

“It’s about digitizing what was before a much lengthier process,” he says.

When seniors visit the Mason Finance website, they go through an estimator to help determine whether their life insurance policy is likely to have value or not and if so, how much. They then complete a 15-minute health quiz. Once the necessary information is gathered, Mason Finance sends each person’s information to institutional investors to find out how much their plans are worth. After passing that information to consumers, those who are interested can complete the sales transaction through the website and have their money wired directly to them. By digitizing and consolidating the process, Mason Finance is able to significantly shorten the turnaround time.

“It can take as long as two months or as little as a day,” Steinmeyer says.

The main purchasers of these policies are large institutional investors who bundle multiple policies and pay their premiums moving forward. For investors, the life settlement investment comes with attractive returns.

“We had a lot of interest from investors. A lot of people see the magnitude of the problem and the opportunity,” Steinmeyer says. “A lot of people care about the larger meaning and impact this business will have on seniors.”

What They Do

Improving the financial health of seniors

Key People

Felix Steinmeyer

Co-Founder, CEO

Charles Mourani

Co-Founder

Location

San Francisco, CA

2018 Challenge Winner
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