1. DETERMINE IF THE POLICY IS NEEDED

Valuing existing life insurance assets is a crucial step in preparing clients for changes that could impact their financial plans. Life insurance is a protection tool and a vital asset in wealth transfer strategies, retirement planning, and estate management. Upcoming tax policy revisions may alter the need to maintain the coverage. By assessing the current value of these policies, advisors can help clients make informed decisions about whether to keep, sell, or change existing policies.

Practice Tip: Examine your clients' existing life insurance portfolios for life settlement opportunities. Don't allow clients to lapse or surrender unneeded life insurance policies without first checking for life settlement value. It could result in a capital event that funds other planning.

2. KNOW WHAT TO LOOK FOR

IDEAL CLIENT

• Insureds with approximately 15-year life expectancy or less
• All types of Universal Life and Convertible Term policies are the most attractive, but any could qualify
• Low cash value
• Policies issued preferred/standard with a current change of health

LOOK FOR CLIENTS IN FINANCIAL TRANSITION

• HNW clients looking to revise complex insurance structures that are no longer performing as expected
• Younger clients paying for the care of aging loved ones and putting off their own planning needs
• Funds needed for any other planning - new coverage on healthier insureds, retirement, investments, long-term care, and charitable contributions
• Succession planning: Retirement/M&A
• Insureds living longer than expected and outliving the current plan
• Philanthropic clients seeking ways to make an impactful donation without disturbing other assets
• Bankruptcy/Divorce
• Liquidity needed to fund caregiving

3. PROTECT YOUR CLIENT'S BEST INTERESTS WITH A COMPLIANCE-CENTRIC LIFE SETTLEMENT RESOURCE

PRACTICE TIP: Ask these questions to make sure a life settlement resource is 100% aligned with you and your client.

• Are you licensed to represent the buyer or the policy owner?
• Do you facilitate a transparent policy auction forcing licensed buyers representing multiple funds to compete, ensuring the highest offer to the policy owner?
• Do you have in-house experts proofing contracts/contingencies from the seller's perspective?
• Can you participate in a due diligence process for my compliance department to approve?