Found Money with Life Settlements

Gregory Freeman |

By Greg Freeman, JD, ChFC, CLU, RICP, CLTC

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The Life Settlement market has delivered to consumers more than $5.6 billion over the cash surrender value.

It happens so often. A client drops an unwanted term policy or surrenders a cash value policy for only the amount showing as net surrender value. Normally, there may be little value lost in the surrender. But many other times, the client is letting the carrier off the hook at distressed prices. Just as I am sure you would not let your client turn in a 1928 silver dollar (worth $500-$30,000) for one dollar at the bank, letting life insurance policies go can be a very big mistake.

Policies can have value far beyond the obvious. We recently had a client convert his $500,000 term policy at the end of its guaranteed premium period for a universal policy so that he could then sell the new policy for $120,000. This was a great example of the value that convertibility can add to a term policy. Ideas like this often appear in policy reviews.

The key factor in policy values for settlement purposes is the life expectancy of the insured. We find that clients over age 70 or clients with a life expectancy of 10 years or less are most likely to benefit from the sale of one of their insurance policies. As their primary advisor, you are likely in the best position to have the opportunity – and the responsibility – to alert your clients to the possibility of a life settlement. However, you may not really be comfortable bringing up a topic with which you may not be the expert. Let AdvisorServe do the work for you.

Our Team of resources includes Ashar Group, one of the leading life settlement firms in the country. Part of what AdvisorServe does is find and partner with excellent organizations like Ashar, organizations that are market leaders in their particular area.

We have linked three resources that can help you evaluate whether a life settlement makes sense for your clients. First, we have an overview of “How Life Settlements & Policy Valuations Impact Estate & Business Planning”. This 2-page overview can be invaluable to you if a situation comes up. The second item is a short review of the “4 Life Settlement Best Practices”, which touches on how to approach this subject. Finally, we want to give you a link to our “Life Settlement Checklist”, an easy way to assess whether you have a situation that could give rise to a life settlement.

We believe that the best way to serve our advisors is to bring in the best available talent to any situation. Our firm interfaces with you directly, but we link in specialists whenever needed to assure you that your clients are being helped in the best possible ways.

Do you think you have a situation that should be considered for a life settlement? Schedule a time to talk with us today. A small effort on your part can yield big results for your client.


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