couple with advisor

We know that as a financial advisor, you want the best for your clients. And when it comes to older clients, advisors can feel especially protective.

After all, you’re managing not just their money, but possibly the legacy they’ll leave their family, or their ability to cover long-term care or assisted living for themselves or a spouse. There’s no question that that’s a lot of responsibility.

Despite this, advisors don’t always bring up the possibility of a life settlement, even if it might be an excellent solution for the client.

It’s certain situations it’s preferable to letting a life insurance policy lapse, and clients can often get a great deal more for the policy on the Secondary Market than they could by surrendering it for cash value. If funds are needed for retirement, or for health expenses, a life settlement can be a good option to help relieve some of that financial burden.

And this is where you come in. As a financial advisor, you may have a fiduciary duty to your clients you’re the gatekeeper when it comes to protecting their best interests.

 What if you had a client who surrendered her policy for the cash value, only to find out that she could have gotten five, six, even 10 times that amount through a life settlement? There’s no question that it would impact the trust she placed in you.

In fact, according to California Broker magazine there have even been legal battles fought over financial advisors’ failure to bring up the Secondary Market as an option for their clients, calling it a breach of fiduciary duty.

Of course, recommending a life settlement when it would not be beneficial for the client could also be inappropriate. That’s why it’s so important to explore all options when a client is considering giving up a life insurance policy.

Why Does Your Client Want to Give Up the Policy?

The place to start, of course, is to ask why they want to give it up. Is it to boost retirement income? Is the policy no longer needed due to a major life change, like divorce? Does the client have a cause or organization that they want to support while living? These are all scenarios where a life settlement could make sense.

As the population ages, financial advisors are going to see these sorts of issues arise more and more frequently in their practices.

(To help you stay ahead of the game, check out our series on continuing education for financial planners — like this post, 5 Apps Every Financial Planner Should Download Right Now).

At the Ashar Group, we are passionate about obtaining the best value on the Secondary Market for your client’s policy. Period. That’s why we take a robust approach to the transaction process that protects all interested parties. We’ve also got resources for financial planners to help educate them on the Secondary Market, and we’re always happy to talk with you about potential life settlements.

You’re the person working for your client’s best interests, and it’s important — both for their financial health and your reputation — to make sure you research and offer them the best options when it comes to giving up a life insurance policy. There are many situations when a life settlement could be a helpful solution. Think a life settlement might be a prudent choice for your client? Find out if the policy qualifies with our free, short quiz, and then give us a call at 1-800-384-8080.