In today’s
rapidly changing financial environment, Trusted Advisors are
becoming more and more involved in their clients financial planning.
Life Settlements offer a unique opportunity for your clients
to dispose of unwanted Life Insurance policies. According to
Doug Head, executive director of The Life Insurance Settlement
association, [The Life Settlement Market is] “growing
like crazy because there are a lot of people who don’t
need estate tax protection or who have been unnecessarily oversold
life insurance”. A trusted advisors fiduciary responsibility
now includes Life Settlements. It is imperative that advisors
learn about the benefits of a secondary market for Life Insurance.
A
study done by the Wharton Financial Institutions Center details
the benefits of a secondary market for consumers. This
is a must read for trusted advisors.
Rationale for a Life Settlement
Individuals
Financial distress/unable to meet future premium payments
Need cash for major expenses (e.g., medical treatments)
The owner/insured has outlived the need for coverage (i.e., all major expenses are paid for)
Needs different coverage/different features (70% of all settlement proceeds purchase more appropriate coverage)[2]
The owner/insured has outlived their beneficiaries
Family/Estate
Change in beneficiaries (e.g., divorce, death of dependents)
Second to die policyholder (i.e., spouse) has passed away
Material change in value of estate
Fund long term care programs
Immediate gifts to family members
Business
Change in key executives/partners
Change in succession plan (e.g., family business)
Need cash/seek to monetize assets
Fund deferred compensation programs
Fund severance packages
Pay off company debt
If you would like to learn more about how Life Settlements can help your clients,
Please call 973-486-3000 or send an e-mail to info@lscoa.com.
[2] Source: Maple Life Financial Life Settlement Report
If you feel that you have or will have multiple policies for sale, please contact our wholesale division at wholesale@lscoa.com
to inquire about our new private label program.
