Over time, the need for life insurance coverage naturally changes. While life insurance can sometimes be the largest asset a client owns, it’s rarely reviewed for fair market value like other assets, including real estate, art, and jewelry. This results in clients making uninformed decisions, missing lucrative planning opportunities, and paying unnecessary premiums.
We all know the advantages of early detection when it comes to identifying health risks. We never want to hear the doctors say, “If only we had caught this sooner…”.
Your automobile is equipped with all sorts of warning mechanisms to detect a problem before it turns into a costly repair.
Your children’s report cards provide early detection of a drop in grades before your child needs to repeat a grade.
Your annual dental visits for cleaning and x-rays help detect cavities before they turn into serious problems.
What about existing life insurance policies that your clients currently own? When was the last time you had your client’s existing life insurance appraised to detect all available planning options?
Right now, you have clients in financial transition. Whether it is retirement, selling a business, divorce, bankruptcy, or simply outliving their financial plan, your clients ask, “What are my options?” Is it best for me to keep paying premiums, change my coverage, surrender my policy, or sell my policy for its life settlement value? If you aren’t answering these questions, someone else will. This leaves your clients and the relationships/trust you’ve built with them vulnerable and in jeopardy.
There are many reasons to consider an Early Detection Valuation to explore the suitability of maintaining existing life insurance coverage. You don’t need to be a life insurance expert or hold a license to consider a valuation or a life settlement. We’re here to help. We’re a qualified appraiser of life insurance for estate and tax planning, charitable donations, and other aspects of financial and retirement planning. Contact us today.
Ashar Group is a nationally licensed life settlement firm that acts as a fiduciary to protect the best interests of policy owners by creating a competitive policy auction to deliver the best value to the seller. Ashar Group does not sell life insurance, management assets, or purchase policies. We are an independent resource for fiduciary advisors and their clients specializing in life insurance valuation for planning purposes.
Life insurance can be the largest unmanaged asset a client owns. Policy owners allocate significant liquidity on an ongoing basis, often long after they transition out of the original need that the policy was put in place to protect. Discussing the opportunity to take an illiquid asset and monetize it when clients are going through a financial transition, whether to fund business, retirement, long term care or charitable endeavors, can be a powerful client conversation.
Learn more about the state of the market from one of the nation's leading experts on life insurance valuation and life settlements.
The path you choose will determine how much value created ends up on the policy owner/sell-side of the negotiation table versus the buy-side. One wrong turn can take you and your client down a path that enhances investor returns at the expense of providing more value to your client. Right now, policy owners are being bombarded with life settlement marketing that can often blur the lines between truth and fiction. It's important to help your clients make an informed decision by choosing a life settlement partner who is 100% aligned with you and your client.
PRACTICE TIP: SECURING INDEPENDENT REPRESENTATION FOR YOUR CLIENT IS THE CORNERSTONE OF A SUCCESSFUL LIFE SETTLEMENT.
An existing life insurance policy, including convertible term insurance, may contain significant value beyond the cash surrender value (CSV) that can be accessed through a life settlement. A life settlement is the sale of an existing life insurance policy for an amount greater than the CSV but less than the death benefit. How much value your client receives is dependent on which life settlement company is chosen to represent them. The good news is that life settlements are highly regulated and require licensing that distinguishes between a seller's representative and a buyer's representative. Securing independent representation for your client is the cornerstone of a successful life settlement.
There are only two entities licensed to handle life settlement negotiations. One represents the seller, the other represents the buyers. Licensed life settlement brokers are fiduciaries to your client, the policy owner. Their sole responsibility is to represent the policy owner in the life settlement transaction and obtain the best offer based on your client’s situation and needs.
One wrong turn can take you and your client down a path that enhances the buyer's returns at the expense of providing more value to your client.
On the buy side, life settlement providers are licensed to represent the best interests of the purchaser. Most advisors are unfamiliar with the term provider, which is often conflated with the term "buyer". As a result, advisors often unknowingly end up on the wrong side of the negotiation table, working with a provider. Consumers are even more vulnerable because of increased consumer-direct ads from providers on television and social media aimed at disintermediating the policy owner's representation. If your client responds to an advertisement and gets involved with a “direct buyer,” they are dealing with a provider.
PRACTICE TIP: A BROKER-MANAGED LIFE INSURANCE POLICY AUCTION FORCES COMPETITION AMONG BUYERS TO ENSURE THE POLICY OWNER GETS THE BEST OFFER FOR THE POLICY.
NOTE: Only choose one broker that forces buyer competition. When purchasers receive information from two or more sources, control of the case is lost, often resulting in a discounted offer to the seller. It also ensures the protection of sensitive client information. A secure policy auction will ensure your client's policy will be reviewed by all available buyers.
Due Diligence: Determine if a life settlement company is on the buy-side or sell-side
Ask potential life settlement resources these two questions:
IMPORTANT: insurance agents who want to receive a commission from a life settlement must first be appointed as a life settlement broker. They may complete one or two life settlement cases per year. They do not have the staff, national licensing, or expertise to run the policy auction. Make sure your resource is a nationally licensed life settlement broker. Fiduciaries do not take commissions but can charge fees for life insurance valuation and other services provided by a life settlement broker.
Bottom line: There are only two licensed entities that sit at the negotiation table. Life Settlement Brokers represent your client’s best interests, and Life Settlement Providers represent the buyer’s best interests. The first step is to verify that the life settlement company you choose to help your client is a seller’s representative. Starting on the right foot will have a big impact on the value your client receives.
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Ashar Group is a nationally licensed life settlement broker that protects the best interests of policy owners by creating a competitive policy auction to deliver the best value to the seller. Ashar Group does not sell life insurance, manage assets, or purchase policies. We are an independent resource for fiduciary advisors and their clients specializing in life insurance valuation for planning purposes.
Use our life settlement probability calculator to determine potential opportunities, or contact us today to learn more about the life settlement solution.
Divorce rates are on the rise - but not among younger couples, as one might expect. Instead, the increase is among couples who are ages 50 and older. According to the US Census Bureau, divorce rates among adults ages 55 to 64 are about 43% and have increased since the 1990s.
While divorce at any age is a complicated and emotional process, divorcing when you're over the age of 50 has some bleaker financial consequences than it might for a 25- or 30-year-old. That's because divorce almost always has a negative effect on a person's lifetime financial state. If you're close to retirement when you divorce, there's much less time to recover.
There are a couple of reasons for this. Women are more financially independent, which allows them to divorce without facing as stark of a financial picture as they once did. Additionally, as longevity increases, the overall length of marriage is longer. This on its own puts couples at a higher risk for divorce. Here are a few things to consider if you're among one of the many adults getting divorced after age 50.
Retirement accounts are usually considered marital property.
Preparing for retirement takes decades of planning and saving by contributing to a 401(k) or IRA. In most states, funds that you contributed to a retirement account over the course of your marriage are considered property and assets. This means that when you divorce, that money gets split between the two of you.
What was once enough to cover a single mortgage and utilities for a single household, might not be enough now that it must cover two separate households. The implications of this are profound, including the possibility of delaying retirement a few years or working part-time while retired.
Does keeping the house make sense?
During a divorce when the house is nearly or fully paid off, is keeping the house the right decision for either party? The house has a value, which means that your ex-spouse will receive some property equal to that value, and it might be retirement or savings accounts, future payments until that amount is met, or a life insurance policy.
In addition, a home comes with considerable costs that might stretch your already reduced retirement savings beyond their limit. Such as repairs, homeowner's insurance, and more.
Alimony is typically granted if the marriage has been a long one.
When marriages last a specific length of time, you can expect a form of alimony or spousal support to come into play. Divorces that end shorter marriages often include some kind of payment for a short time to assist the less well-off spouse in recovering.
Separating from your spouse can wreak havoc on not only your emotional life but your financial one as well. If you are going through this difficult event, thinking about money is probably the last thing you want to do - however, if you don’t, you could find yourself in a highly precarious financial situation once the divorce is final.
If you retain ownership of a life insurance policy during divorce negotiations that has become unnecessary, or a burden, you may want to consider a life settlement. Selling your policy for an amount greater than the cash surrender value can provide a significant liquidity event allowing you to bridge the gap in earnings.
Life settlements are an underutilized option that can be very helpful for seniors in certain circumstances. To learn more, read more about how this option can be beneficial for policy owners, or contact us today.
Retirement is more than just turning in your notice at work and packing up your desk. Beyond looking at your finances, there is other planning that should go into the decision to retire.
Define "retirement".
What does retirement look like to you? Are you sitting on the beach somewhere or traveling the world? Many people know what they are retiring from, but they don't always think about what they are retiring to. Write down your retirement goals - don't say just "travel" but instead "cruise to Cancun" or "bus tour in European countries".
Many people find themselves in financial trouble after retirement because they didn't weigh the opportunity costs of their ideal life: they'll move to the west coast for good weather but rack up high travel costs to see their grandchildren in the Midwest every other month, for example.
Be realistic about costs of hobbies: many financial planners predict you'll spend less in retirement than you did previously, but a pricy hobby (like college classes or sailing) can often derail the best-laid budget.
Improve your health.
Just before your retirement date, it is best to see all your healthcare providers. While at your appointment, ask your providers to help develop a plan to keep you fit and alert during your retirement years. Commit to the suggestions, whether they are eating two green veggies a day, walking around the mall a few times a week, flossing, or doing brain games to stay sharp.
Find any opportunities for added income.
Look for opportunities to turn your hobbies into profit. You can sell your crocheted blankets to friends, teach piano to the neighborhood children, or turn your business skills into a consulting job. Many people get bored after a few months of retirement and actually prefer partial-retirement, in which they pick up part-time jobs. Remember, retirement doesn't have to mean not working; it's just having the freedom to do what your want when you want.
If you don't want to continue working during retirement, another option is to sell your unwanted or unneeded life insurance policy in a life settlement. A life settlement can create a significant liquidity event that can fund your retirement goals; however they look. To see if your policy could potentially qualify for a life settlement, take our Policy Value Questionnaire. For more details about life settlements and policy valuations, contact us today.
Nearly 90% of financial professionals with senior clients have never helped guide them through a life settlement transaction according to a recent poll we conducted. And only 13% had their clients' life insurance appraised within the last six months. This lack of education means there is a lot of money being left on the table each year when policy owners lapse or surrender policies that could have had value as a life settlement.
On the client's side, money is tied up in burdensome premiums when the policy could be liquidated into a lump sum payment to the policy owner. On the advisor's side, money is lost in business growth opportunities. Beyond that, there are a few other reasons financial professionals need to familiarize themselves with life settlements.
Statistics show a majority of today's seniors are financially unprepared for retirement.
According to a Bankrate.com survey, 21% of respondents have nothing saved for retirement. As so many news outlets have reported over the past several years, this is nothing less than a retirement crisis. In addition to living costs, many seniors will need to pay for long-term care or costly medical treatments in retirement. If they aren't able to cover that cost themselves, it could fall on their children or other family members,
A life settlement can provide the cash these seniors need today. In these cases, liquidating a costly, unnecessary life insurance policy can ease the financial burden on the policy owners and their families.
A life settlement can create up to 8x more value than the cash surrender value.
A life settlement is the sale of an existing life insurance policy for a value greater than the cash surrender value and less than the death benefit to an institutional buyer. The key to receiving fair market value for your clients is partnering with a licensed life settlement broker, such as Ashar Group.
Through Ashar's proprietary auction process, we submit the policy to all licensed buyers creating a competitive bidding environment to drive up the value of your client's policy. If your client's policy qualifies for a life settlement solution, why surrender the policy for a mere fraction of its value?
Knowing all the options available to your clients is simply the right thing to do.
At Ashar, we believe in a simple principle: "do what is right and you will be blessed." Everyone., especially seniors and their advisory team, need to know what financial options are available to help them thrive in their later years. A life settlement can be an advantageous alternative to lapsing, surrendering, or materially changing a policy. The more financial experts know about the industry we serve in, the better we're able to educate and serve our clients.
If you'd like to find out more about life settlements, watch our video, which gives an overview of what we do and how we do it. And if you're ready to find out if a client's policy might qualify for a life settlement solution, take our Policy Value Questionnaire.
Life insurance in retirement can be a tricky topic to navigate for planning professionals. The biggest question we hear from advisors and their clients is, “How can this policy benefit me while I’m retired?” To which our response is typically about how that depends on the client’s financial goals which have been determined with their financial professional. There are several ways in which a life insurance policy can benefit you while in your retirement years.
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Over the past several years, life settlements have taken center stage in the financial world as regulations around life insurance have increased. And as such, they have become a valuable tool in comprehensive planning. However, we still come across many financial professionals who may know what a life settlement is, but not how the transaction works or could help their clients. This is where Ashar Group can help.
Are you wondering whether a life settlement is the right choice for your client? Selling a life insurance policy is a big decision that you should be sure is the right option before recommending it to your client. However, when a senior, and possibly their family, is struggling under the immense burden of financial stress, a life settlement can be exactly what they need to alleviate financial stress.
As a financial professional, you have the power to help them relieve that burden. It’s vital to know what options are available - and a life settlement could be one of them. Here are a few ways to determine whether a life settlement makes sense for your client.
