As life settlement brokers, we know that American seniors are leaving huge amounts of money on the table in lapsed life insurance policies.
That’s why we work so hard with financial advisors to help seniors sell their life insurance policies as life settlements, so they can liquidate those valuable assets and use the funds for some of life’s most burdensome expenses, like long-term care or medical costs.
But you don’t have to trust us. According to multiple sources drawing from publicly available data from 2008, seniors are lapsing at least $112 billion in life insurance policies every year.
We, as well as many others in our industry, believe that data from today would show that number to be even higher.
Life settlements can help
Financial advisors are in a unique position to help their senior clients protect their quality of life, whether they’re healthy and living at home, or living in a long-term care facility.
We know from the countless advisors we’ve worked with throughout the years that paying for long-term care and medical expenses can put intense amounts of stress on the entire family.
Since many family members usually contribute to payments for a senior’s care, those seniors who are receiving the care worry about the financial effect on their adult children - and especially how it will affect their grandchildren’s futures.
Those who are helping to pay for a parent’s long-term care can feel financially trapped, unable to save what they would like to for their own family. College funds may be smaller than intended. Perhaps they can’t give their children the piano lessons, drama classes, or other extracurricular activities that they want to.
This is an undesirable situation for everybody involved - and yet, it’s an incredibly common one.
There are many factors that have contributed to this state of affairs.
People are living longer, and so are more likely both to need long-term care, and to need it for more years than before.
Medical costs and the cost of long-term care are rising, and showing no signs of slowing.
The Great Recession damaged countless seniors’ retirement funds, leaving them with less money than they need to live comfortably.
Together, these factors have created a true crisis for thousands of American families.
Advisors who are seeing their clients struggle with situations like this have a tool that could help many of them: life settlements.
When seniors sell their life insurance policies through their financial advisor and a life settlement broker, like Ashar, they receive a lump sum of cash that is greater than the surrender value of the policy.
We’ve brokered life settlements in which the policy owner received 800% more than the policy’s surrender value.
The senior is able to use the lump sum payment from a life settlement however he or she wishes. Sometimes, it’s put toward long-term care. One popular option is to place the money into an account that makes regular payments to the care facility.
The relief that life settlements can give to a family is extreme. With those additional funds, families can put some of their focus back on the most important things - spending time together, making their loved one comfortable, and ensuring that their own children are well provided for.
If you have a client whom you think would be a good candidate for a life settlement, take our quick 7-question policy quiz. This will tell you if the client’s policy is likely to qualify for this solution.
You can learn more about how the life settlement process works on our website.