At Ashar Group, our objective is to protect the interest of all parties throughout the settlement process. We believe that advisors need to be confident they are associated with a partner that fully understands the complexities they face today, both legally and ethically.
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As a secondary market best practice – Know who you are dealing with and whom they represent. Here is a quick overview of who does what in the Secondary Market Process:
Insured/Policy Owner – First, of course, is the person or entity that has a policy that they want to sell. They have all the rights by law granted to them as the policy holder. For example, they have the right to sell their policy to another entity who would then become the owner and pay all future premiums.
Financial Advisors/Producers – These are the advisors to the policy owner, such as their insurance agent, accountant or an attorney who might, on behalf of the insured/owner, contact a life settlement broker.
Settlement Broker– This is the secondary market partner who helps the client’s advisor find the best secondary market value for the client. These firms are required to be licensed in 90%+ of states, advocate for the seller and advisor, and have in-depth knowledge of the current purchase parameters and which institutional funds are bidding most actively. A life settlement broker represents you and your client, and creates competition to drive the best offer for the client. Brokers are not the buyers of the policy.
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It’s an undeniable fact that an overwhelming number of life insurance polices never pay a death claim. Policy owners pay years of premium and then abandon a policy for pennies on the dollar. These lost opportunities should not be happening today because of the many options offered by the secondary market. A life settlement offers options for a policy holder to obtain much needed funds. Life settlement options can provide funds for mounting health care costs, reduce a large premium that that has become unaffordable, or merely receive a greater benefit for a policy that is no longer needed. Additionally, in the U.S. as with other products in the insurance industry, selling insurance policies in the secondary market is regulated and supervised at the state level.
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For Immediate Release
Ashar Group announces the SMV®, Secondary Market Valuation for the Financial Services and Life Settlement Industry
Orlando, FL – August 21, 2014 (Marketwire) Ashar Group today announced a new valuation standard for determining fair market value of life insurance policies in the Financial Services and Life Settlements Industry called the SMV®, or the Secondary Market Valuation℠.
Ashar’s proprietary SMV®, Secondary Market Valuation, is a unique analysis performed by Ashar Group to assess the fair market value of a life insurance or annuity asset for planning purposes.
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As clients get near the end of their policies, many factors begin to come into play. Changing investment needs may not allow time for their universal life policy to mature. Or they no longer need their term life insurance policy, or they just want to redirect premium payments and any cash available from their policy to new investment opportunities. Whatever the reason, a life policy settlement can help your clients maximize their retirement income by recouping premiums or realizing a substantial payout from the secondary market for their life insurance policy, even their term policy.
Life Insurance and Annuities are assets, just like real estate, that have a market value based on supply and demand. If you decided to sell your home, you could sell it on the open market for a fair price to a qualified buyer. It’s the same with Life Insurance and Annuities. But instead of the real estate market, you’re selling these assets on what’s called the Secondary Market.
So, why not get a secondary opinion® of potential secondary market value before you make any final decisions about existing life insurance or annuities?
As infrequent as this scenario may sound, it is far more common than your might think— the unsuspecting policy owner who abandons or cashes in their life insurance policy without first checking for SMV®, secondary market value. And for a good percentage of the time, these abandoned policies were rich in “hidden value” that was left undiscovered.
Trust owned life insurance (TOLI) has been a subject of much concern since the mid-90’s when the Uniform Prudent Investor Act (UPIA) came on the scene. As a result, a new cottage industry of policy review companies sprung up overnight to take on the delegated responsibility of review and reporting. Life Insurance is a complex asset to manage and to do it as a prudent investor would.
As economic and demographic circumstances emerge to create a demand for liquidity and cash flow solutions, alternatives like the SMV®, the Ashar Group Secondary Market Valuation, have been a prudent and valuable solution for advisors to finally provide the clarity and concise policy analysis clients demand. The simplicity, accuracy and trustworthy insight of the SMV® is a smart choice in the following situations:
It's up to you to source, review and facilitate solutions for your clients. That’s why the Secondary Market isn't just an option for fiduciaries, bound to serve clients as though the funds were their own — it’s an option that is simply good practice for every advisor if the circumstances are appropriate. Can you imagine if a client surrendered or lapsed a policy that could have been worth 10 times more than the cash value? How would that impact the trust the client had in the advisor? Would it open the door to a competitor? Would it damage a reputation?
