If it’s been awhile since you looked into life settlement options, a lot has changed. Historically, life settlements were limited to whole-life policies, but new developments offer advisors greater flexibility and unlock hidden money for their clients.
Term insurance can be converted to permanent insurance and sold as a life settlement. Most people who buy term insurance hope they will never need it; and when the term expires, they are thankful that they remain alive and well. However, term insurance with a conversion rider can offer a windfall. Seniors can convert the policies to whole life and perform a life settlement in a multi-part transaction that will provide them with a payout and no out-of-pocket expenses.
The newest thing: Sell half and keep half. In recent years, the life settlement industry has introduced an exciting new product known as retained death benefits. With this creative and flexible option, senior policyholders can sell their policy for immediate cash but also keep a portion of the death benefit for loved ones. The buyer takes over premium payments, and the policyholder retains a percentage of the face value payout for his or her beneficiaries.
Brokers can ensure the best deal for your client. Unlike certain transactions, where going direct might make some sense, it is just the opposite for a life settlement. Life settlement providers—which represent the buyers of policies—have a mission and fiduciary duty to buy policies as cheaply as possible. When you take a policy directly to the provider, you eliminate the competition and allow for the lowest possible offer. Conversely, a broker can take your policy to a much wider market of potential buyers, some of whom will only transact business through a brokerage. This will bring in the most competitive offers for any policy.
For many policyowners, education is the key to making decisions that will maximize their assets and provide for their financial goals. To learn more about life settlements and how to offer this valuable option to your clients, visit genesislifesettlements.com or email us directly to talk one-on-one with a Genesis advisor.