Your Client's Life Insurance Policy May Be on the Chopping Block

In some cases, the cash proceeds can reach as high as 60-80% of the policy’s face value. Clearly it is in the policy owner’s best interests for agents to at least explore the option with them.

It’s also important to note that term policies, if convertible, may qualify for a life settlement.

Retired Business Owner Sells $2 Million Term Policy for $600,000

We recently brokered a life settlement transaction for an agent whose client owned a key person term policy that became obsolete when he retired. The premium payments were becoming a burden and the client was looking for an escape hatch.

After conducting a thorough review of his client’s need for life insurance coverage, the agent recommended they convert and sell the policy in the secondary market.

We were brought in to broker the transaction and submitted the case to 17 potential buyers.

We were successful in generating competitive offers from seven institutional money sources that ranged from $180,000 to $600,000. The client and his family were stunned to receive such a cash windfall for a policy they thought had no value.

Opportunity for Insurance Advisors

The current economic climate presents an opportunity for insurance professionals to take a leading role in helping senior clients make informed choices that are in their best interests.

Reach out to other professionals in your referral network (e.g. financial planners, CPAs, estate attorneys, bank trust officers, etc.) and offer to provide your professional expertise regarding the growing life settlement market and the option for clients to monetize life insurance policies that have become marginally beneficial.

Consider sharing with your older clients and professional referral sources our collection of life settlement success stories that clearly illustrate the financial advantages of selling excess or unwanted life insurance coverage — especially policies that are on the verge of lapse or surrender.

Takeaways

Today, as seniors begin to feel the sting of higher inflation and look for ways to slash expenses, more policies will be at risk of lapsing.

Selling an unwanted policy in the secondary market can help seniors salvage a portion of their insurance investment and can often provide an unexpected cash windfall for their retirement.

When the decision is made to explore a life settlement, be sure to work with an experienced life settlement broker who will negotiate with multiple secondary market buyers to obtain the highest possible offer.

Life settlement brokers, including Asset Life Settlements, have a fiduciary duty to represent the policy seller’s best interests — not the buyer’s.

A good broker should be able to provide an immediate pricing analysis. Our firm, for example, offers an online pricing calculator.

Jeff Hallman and Scott Thomas are co-founders and managing partners at Asset Life Settlements, a life settlement brokerage company based in Orlando, Florida. Hallman can be reached at (888) 335-4769, extension 1108, and Thomas can be reached at (888) 335-4769, extension 1115.]