Found Money with Life SettlementsSubmitted by AdvisorServe on July 20th, 2021
By Greg Freeman, JD, ChFC, CLU, RICP, CLTC
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.
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. AdvisorServe is a member of Partners Financial. Kestra IS and Kestra AS are not affiliated with AdvisorServe or Partners Financial. Kestra IS and Kestra AS do not provide tax or legal advice. This site is published for residents of the United States only. Registered Representatives of Kestra IS and Investment Advisor Representatives of Kestra AS may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed. Not all products and services referenced on this site are available in every state and through every representative or advisor listed. For additional information, please contact Kestra IS Compliance Department at 844-553-7872. Any website links referenced on this site are being provided strictly as a courtesy. Neither Kestra IS, Kestra AS, nor AdvisorServe are liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of the links provided.