(3 Minute Read)
Life settlements are a great way to turn non-liquid assets into additional money. But what can be done with it? A life settlement opens up a world of possibilities—not just for your client, but for you as the advisor too.
Liquidity
When a client’s old life insurance policy is sitting around, no longer needed and underperforming, it’s often more of a strain to keep it than to let it lapse. But if you sell a life insurance policy in a life settlement, it provides a great lump sum of cash that can be used for other, more lucrative investments. You get to manage more assets, and your client bridges the retirement gap. It’s a win-win.
More Vacations
Who doesn’t love to travel? And by the time your clients have reached retirement, they’ve earned the opportunity to visit the world’s most popular destinations. A life settlement can provide the additional funding that they need to book the air travel, hotel costs, and all of the other expenses they might incur along the way. Many people who sell their life insurance policies plan trips through the U.S.’s many state parks, travel across Europe, or lounge at a resort in the Caribbean, there are no limits to where you can go.
A Winter Home
For some, traveling across the globe isn’t as appealing. Instead, they like to be snowbirds. They’ll winter somewhere warm, and spend their summers in their primary home. But buying that winter home can be a burden, especially on the strict budget that retirement requires. However, by freeing themselves of the monthly premium of a life insurance policy, as well as getting a nice amount of cash for a life insurance policy, many retirees find making a down payment on a winter (or summer) home much easier.
On the Family
Some seniors may just simply enjoy seeing their families get on a little better. The money from a life settlement can go a long way in setting up a nice trust fund for grandchildren. Or depending on how old the grandkids are, some who sell life insurance policies opt to use that money to help pay for a college education. That leaves their grandkids in a much better position after they graduate, with few to no student loans. It can be incredibly gratifying to put a family member on a great track for life.
Charitable Donations
Many people dedicate their lives to a cause. And while it’s not uncommon for people to leave money to an organization in a will, some might actually like to see the good that can be done with a large donation before they pass away. With a hearty life settlement, any portion of that sum can be donated to the charitable cause of the insured’s choice—and they may receive a tax write off for the donation as well.
The list goes on, but these are some of the ways people have enjoyed the money they’ve received in a life settlement. From building a better nest egg, paying for unexpected medical care, to simply living a better life, a life settlement can make a huge difference in retirement.
A life settlement may not be a good fit for everyone, but if your client has a life insurance policy they no longer want or need, it’s worth exploring its potential in a life settlement. Use our qualification calculator to see if it qualifies.
I would be happy to answer any questions you might have about this, or any other life settlement topic. I can be reached at 888-849-0887 or llagrotte@lsa-llc.com.
