Many of your clients may lapse or surrender their life insurance, intentionally or unintentionally, and they do so for any number of reasons, including (among others):
- They can no longer afford the coverage
- They feel they no longer need (or want) the coverage
The problem with that course of action is that your client may be leaving equity on the table that they are completely unaware of. This is where a life settlement may come in and provide much more cash to your client than simply surrendering the policy.
The reality is that the cash provided by a life settlement may be a great deal higher than what might be provided by surrendering the policy. That doesn’t mean that all clients or policies are life settlement candidates. However, for client and policy situations where a settlement may be a fit, it could be a tremendous advantage to your client.
Typically, and in general terms, the best candidates for life settlements are clients age 70+ who have had a decline in health since the issuance of the policy. That said, it is likely prudent for advisors to at least consider a life settlement anytime s/he becomes aware that a client may consider lapsing or surrendering their policy.
Client situations which may dictate that a discussion of the potential value of a life settlement may be appropriate include:
- Anytime a client is considering lapsing or surrendering their policy
- A decline in estate value and/or potential estate tax liability
- Death of a spouse or divorce
- Sale of a business
- Retiring from or leaving a business with key person, buy-sell, or executive bonus coverage
- Seeking funds for retirement, long term care needs, and more
Most important, we at AIB can help. We work with sources for the funding of life settlements. We can help put your client’s policy out in a competitive bidding process to garner the best offer(s). And, we have outlets for most types of life insurance policies, including not only traditional UL and convertible term, but also GUL and even whole life!
We also are aligned with a firm that has a proprietary platform that can not only provide quick estimates of whether a policy may be suitable for a life settlement, but also the ability to “data mine” your book of business to determine if there are life settlement opportunities within that book.
If you’d like to learn more about life settlements, check out the life settlements page at our website, as well as our AIB Life Settlement Pre-Qualification Sheet. Then, if you need to consult with a team member, reach out to the AIB Life Sales Support Team at 800.695.8224 – Option 3 or via email!