Life insurance has forever been a part of sound financial planning and is a flexible tool that can be used to fulfill a number of needs and achieve many different objectives.
Whether you are trying to protect human life value, provide for the income needs of a surviving spouse, build cash value for retirement, fulfill college planning needs or developing a complex estate planning solution to cover taxes, life insurance is an integral piece of the planning puzzle. And now in the last 10 years or so, life settlements have become another important part of life insurance planning. As agents, it is our responsibility to be aware of this valuable potential asset to our clients and seek to explore opportunities for our clients and prospects in this market.
While life insurance is normally a vital tool in financial planning, there are some scenarios where a life insurance policy is no longer needed or wanted. Some of these reasons include:
- Economic circumstances dictate that premiums cannot be continued or can’t afford to keep the policy.
- Purpose of the insurance has been fulfilled. For example, mortgage paid off, kids graduated from college, retirement goals met.
- Policy has underperformed or has not been funded properly and is in danger of lapsing.
- Client has excess insurance and no longer wants to maintain the current level of coverage.
- A key man policy purchased by a business is no longer needed or required. For example, company sold or the key man retires.
- Estate planning needs have changes due to changes in the Federal Estate Tax guidelines.
In these cases, it is our duty as agents to bring the life settlement option to the clients who meet the criteria for a potential life settlement. It only makes sense to offer the opportunity to our qualifying clients and prospects as a life settlement is usually a win-win for both the client #1 but also for you the agent. Why not look to bring value to your clients? The truth is that it is our responsibility to offer this potential alternative to simply dropping the policy, letting it lapse or surrendering the policy for its available cash value.
No matter what the situation, our clients depend upon us to to fulfill our fiduciary responsibility and bring to the table the all options available. One of these options maybe a life settlement which can have a huge impact on the lives of our clients. It may require a little work on our end as agents but going the extra mile can make all the difference.
For some specific examples of how life settlements can benefit our clients see, I No Longer Needed My Life Insurance Policy So I Sold It For $43,400 and I Could No Longer Afford My Life Insurance and My Agent Got Me $58,000.