In a time where receiving a higher payout with a life settlement could make the difference between accepting or delaying a needed medical procedure, far too many seniors are unaware of this option and instead surrender their policies or let them lapse. This fact is supported by the Insurance Studies Institute who discovered that 90% of the seniors who did let their life insurance policy lapse would have considered a life settlement had they known that receiving higher payouts was an option.
It’s also important for seniors to understand the difference between the primary insurance market and the secondary market. The primary market is where you would buy your initial policy, but it is not the place to give it back. Surrendering a policy back to the business entity (primary market) who wrote your policy would mean receiving a value far lower than fair market value. This is an important distinction. Typically, a Secondary Market Specialist can sell your policy to an institutional investor at a far higher price than the cash surrender value paid by the insurer. And when following best practices like any good Secondary Market Specialist would, it really is a good deal for all parties involved:
- The seller of the policy gets much more value out of their policy then surrendering it, infusing their budget with much needed income to pay off necessities like rising medical expenses
- The buyer of the policy obtains a deal that will pay them a death benefit sometime in the future
- The insurance company still collects premiums, only now from the buyer (new owner)
When selling the policy, a reputable Life Settlement Broker receives multiple bids from companies who would like to purchase the policy. The broker then leverages these bids to drive competition and obtain the fair market value of the policy for your client. Under the right circumstances, determining the fair market value of a life insurance policy can be a significant event, providing valued income for the original policyholder.
Go to https://ashargroup.com/policy-value-questionnaire/ to take the first steps in determining if a policy may qualify for a life settlement. It only takes a minute, and it could help save your clients thousands.
