(2 Minute Read)
As a trusted advisor, your clients rely on you to make informed decisions on their behalf. You’re making choices that are directly impacting their finances—their lives—and they have faith that you’ll make the right decisions, or at least guide them in the right way.
So, would you take $100,000 of a client’s money and toss it down the storm drain? Without ceremony or pomp, just let it wash away?
The answer is obviously no. You’re too good at your job, have too much common sense, to do something that crazy.
Unfortunately, this happens every day. Many advisors have elderly clients with life insurance policies that, due to varying circumstances, they no longer want or need. Perhaps they’re underperforming, or maybe the policy just isn’t serving the need that it used to. In any case, more often than not, they simply let the policy lapse.
Letting a life insurance policy lapse is just like letting $100,000 (or more!) wash down the drain. Why? Because many trusted advisors either don’t know about or simply don’t consider the alternative of a life settlement.
A life settlement is the sale of a person’s life insurance policy to a third-party investor. In a life settlement, the policy’s owner transfers the ownership of that policy in exchange for an immediate cash payment from the buyer. Candidates for life settlements are typically 70 or older, with a life insurance policy that has a “face value” (death benefit) of more than $100,000. That money can be allocated to better, more effective investments, or can be allocated to whatever the client may desire.
A life settlement may not be a good option for everyone, but it’s something that merits investigation for both advisors and their clients. It opens up a world of possibilities for liquidity in alternative investment options, or could help a client with a bigger nest egg for retirement.
If the idea of throwing $100,000 of your clients’ money down the drain just isn’t fathomable, see if you client is a good fit for a life settlement by using our qualification calculator.
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.
