April is National Financial Literacy Month

April 15, 2015 

Are You Educating Your Clients about Life Settlements?

April is National Financial Literacy Month, and for those of us in the financial services industry, we have a responsibility to broaden awareness of the importance of sound money management and proper financial planning.

Financial literacy is defined as the ability for consumers to use knowledge and skills to manage financial resources effectively for a lifetime of financial well-being. This includes effectively managing one’s insurance assets. Life insurance policies that may have been purchased many years ago for income replacement or estate tax purposes may have outlived their usefulness.  But many consumers lack awareness of all the options available to them.

This month as we highlight sound personal finance practices, we encourage producers and other financial professionals to give thought to whether their clients are effectively managing their options as it relates to life insurance policies they may no longer want or need.

Surveys and other data compiled by the Life Insurance Settlement Association (LISA) point to the fact that tens of thousands of seniors with billions of dollars of life insurance are unaware of the life settlement option and are therefore forfeiting potential financial benefits from policies that are simply lapsed back to the carriers.

Other alarming data reported by LISA includes a 2010 survey prepared for the Insurance Studies Institute showing that more than half of seniors over the age of 65 are not familiar with the option to consider selling their life policy. Furthermore, 90 percent of seniors who have let a policy lapse would have considered selling it if they had known a life settlement was an option.

We encourage producers to take a moment during the month of April and reach out to their clients to explain that a life settlement may be a viable solution for unwanted life insurance policies on the verge of lapsing or being surrendered.  Take the time to remind your clients that as the life settlement industry continues on a growth curve, and as more funding enters the secondary market for the purchase of policies, the outlook is optimistic for seniors seeking to sell their policies for amounts substantially greater than the cash surrender value.

And finally, agents familiar with the life settlement marketplace recognize that the life settlement broker has traditionally played a key role over the years in creating the secondary market arbitrage (bidding war) that ultimately establishes each policy’s “fair market value.”  At Asset Life Settlements, we want to remind producers that accepting an offer directly from only one or two providers/funders may not be to their client’s advantage.

If you have a case you would like to discuss, call us at 888-335-4769. We will be happy to shop the policy to multiple funders in pursuit of the highest possible offer.