Start the Conversation About Life Settlements With Your Client

Staying ahead of the most relevant and timely guidance for your clients is an ongoing challenge. At times, you are stuck between learning about new innovations or making sure you get in front of the right clients at the right time with the right information. To add more value to your relationship with your client, you need to understand the benefits of several different asset classes that could align well with each of your clients’ unique financial goals.

There is one asset type that’s often overlooked but could be valuable for your clients who qualify. For older Americans with unneeded or unwanted life insurance policies, a life settlement may be an option. The retirement years are often characterized by rising and unexpected costs.  A life settlement allows your client to sell their life insurance policy for cash, providing additional liquidity to cover retirement costs, long-term care, or other expenses. So how will you know if a life settlement is the right option for your clients? Try this conversation starter, or come up with one of your own:

A good first question to ask might be, “Have your life insurance needs changed?” This question may lead to a couple of important discussions, such as: reasons why life insurance holders typically sell policies and benefits of selling a life insurance policy.

Reasons Why Life Insurance Holders Typically Sell Policies

• Payment of the premiums has become prohibitive.
• Avoid potentially paying higher premiums with a policy renewal.
• Divorce or other substantial changes to their list of beneficiaries.
• New tax laws have altered the structure of their estate planning so their life insurance policy is no longer necessary.

Benefits of Selling a Life Insurance Policy

• Meet the cost of long-term care, which is becoming increasingly expensive for seniors.
• Set aside funds for grandchildren’s college education or charitable gifts.
• Resolve debt obligations.
• Pay for travel, hobbies, and other adventures.
• Cover expensive medical bills, prescription drugs, or therapy which improves quality of life.
• Provide additional liquidity for other investment opportunities.

Assisting with the sale of your client’s life insurance policy may be simpler than you think. The process begins once you and the policy owner determine that he or she could be eligible for a settlement which is why starting the discussion is critical. To get an idea of how much your client’s policy may be worth, we have a life settlement calculator that can help you determine whether or not a settlement could be an option. Once the decision is made to sell the policy, Magna will walk you through the rest of the process.

This all sounds great but why isn’t everyone who is qualified for a life settlement doing this? Quite frankly, many life insurance policy holders are unaware of life settlements, so this is an opportunity for you to educate and empower them with what may be a viable option. Magna is here to help with any questions related to life settlements.

We’re happy to help you evaluate your clients’ policies for a life settlements, so schedule a call with Russell Smith, Director of Advisory Development at Magna if you have questions.

*Comments provided in this post are for informational purposes only and should not be construed as financial, legal or tax advice, recommendations, or solicitations. Please consult your financial, legal or tax professional with questions related to the information presented, or for advice as to whether a life settlement is right for you.