Educating Your Clients About Their Life Settlement Options

Green Settlements Staff

If there’s one challenge facing financial advisers, life insurance agents and their clients alike, it’s a distinct lack of resources detailing how life settlements work. Without understanding your options—or the options available to your senior clients—it’s impossible to make informed decisions about the future.

To further complicate matters, life settlements fell victim to bad press during the market’s early years when it was still a nascent industry. Myths and misinformation took hold of the public’s perception, and this hurt the life settlement industry, deterring qualified life insurance policyholders from exploring their full range of financial options.

This also led to confusion among life insurance professionals, with many agents left questioning whether life settlements were even truly legal or not. Thanks to increasing awareness of the secondary market, agents and policyholders now have a better understanding that life insurance policies are considered assets that can be sold, just like any other possession or piece of property.

Before making any specific recommendations, it’s a good idea to get a better sense of your client’s short- and long-term needs by asking them the following questions:

  • Do you have enough retirement savings to last the next 10 years? 20 years? 30 or more?
  • Do you plan to sell any other major assets, including your home or vehicle, in the near future?
  • Do you have an emergency fund in case of unforeseen circumstances, such as a sudden medical issue?
  • Have you experienced any recent changes to your health status? Has your spouse experienced a change in their health status?
  • Are your children financially independent?

Answers to these questions will reveal whether or not your client is in immediate need of money, as well as how prepared they are to handle issues that may arise in the future. The more you know about your client’s circumstances, the better equipped you’ll be to provide valuable guidance.

Next, review all of your client’s options with them, including alternatives to selling their policy such as surrendering it back to the insurance company (which typically yields little value to the policyholder), or selling a portion of the policy in exchange for a partial payout. After you’ve explained each potential scenario and outcome, your client is positioned to make the choice that is right for them. In addition, they’ll likely appreciate your unbiased expertise—by putting life settlements on the table alongside all their other options, you’re ensuring the client is exposed to every possible opportunity, not just the ones that benefit you as the adviser.

Once you’ve assessed their needs and provided all the facts, it’s time to determine if your client qualifies. Seniors who are at least 65 years of age and who own a term, universal or whole life insurance policy with a face value of $100,000 or more are potential candidates for a life settlement.

Armed with the knowledge and support of an educated agent, policyholders nationwide are starting to discover the potential value hidden in their unwanted life insurance policies. Find out if your client qualifies by getting a free, no-hassle quote today.

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