Professional Advisors

If you are a financial advisor or insurance professional, your clients often turn to you to for guidance on matters relating to their life insurance coverage. Chances are you have many existing clients to whom you sold policies years ago for income protection or for business purposes.

But as client age, family dynamics change. Expensive life insurance policies that were purchased while the client’s children were still at home or in college may no longer be needed. Or a key man policy purchased as part of a buy-sell agreement may no longer be relevant when the key person decides to retire and sell the business.

When clients experience major lifestyle changes that make the current life insurance coverage obsolete, financial advisors have a duty to recommend the most suitable solution to optimize their insurance asset. (Click here for an actual case example involving a life settlement for a life insurance package valued at $11.6 million.)

Unwinding life insurance policies that are no longer needed can be challenging, especially when it involves policies with low cash surrender value and expensive premium payments that may be draining the cash assets from the client’s estate.

While surrendering the policy for its cash value may be the first thought, the cash surrender value is typically only a fraction of what your client could receive for selling the policy in the secondary market.

Allowing an unwanted policy to lapse should be avoided at all costs. But industry data confirms that many seniors choose this option simply because they want an immediate exit strategy from expensive premium payments.

Each year, more than $100 billion face value of life insurance lapses by seniors over the age of 65, according to the Life Insurance Settlement Association. Most policy owners were not aware that a life settlement could have been an option.

As experienced secondary market advisors and brokers, the team at Asset Life Settlements helps advisors explore all possible solutions available to your client, such as selling the policy in the secondary market in order to:

1. Obtain a cash settlement far greater than the cash surrender value
2. Reduce coverage by retaining a portion of the death benefit
3. Obtaining a combination of cash proceeds and a retained death benefit

Financial advisors have a duty to offer creative design solutions, coordinate and collaborate with the client’s other professional advisors, and become the catalyst for helping the client achieve their financial and retirement goals. (Click here for an actual case example of how a financial advisor deployed best practices and worked with other members of the client’s estate planning team to sell the client’s policy is in the secondary market.