Life settlements may have had a bad reputation in the past due to ambulance chasers however they are becoming a valuable tool in today’s environment. Baby boomers are starting to reach the ideal ages for life settlements and the need has never been greater. Life settlements can help with cash flow and to recoup some of the invested costs of a life policy the client is considering dumping or in danger of lapsing. Lapsing UL policies are a real issue recently given the low interest rate environment we have been facing for a while and a life settlement could just be the answer.
Additionally, as baby boomers continue to age, Long Term Care (LTC) becomes a concern and many have not planned for it yet. Funds from a life settlement could be used to purchase a LTCi policy leveraging the money even further. LTC solutions are quite diverse these days including Guaranteed Issue options. Without addressing LTC a client’s entire financial plan could go down the toilet.
Failing to plan limits your options and reduces the leveraging capabilities that you could enjoy while your younger and healthier however there are options. A great white paper addressing just this can be found here: How to solve a crisis when you’ve failed to plan for LTC
Finally, it comes down to comfort level when looking at proposing a life settlement for your clients. If you’ve never done a life settlement before there are some things to consider and know. The typical client for a life settlement is older and possibly not healthy, typically 70 years or older. There are other factors that play into the decision as well such as the type of policy and if its convertible (term can be converted prior to 70). The investor that purchases a life settlement will be making the payments from that point forward along with writing a check to the client therefore it must make financial sense for them to move forward. Knowing this a life settlement isn’t for those that wish to keep their policies but for those who need that extra cash flow and/or are planning to drop their policy anyways.
To get a better understanding a quote request form drop me a line and we can discuss.
Inspiration for this post: lifehealthpro.com – The life settlement market is heating up!
