Your client’s life insurance policy may be the most valuable asset they own.  

Seniors in retirement often drop their life policies. The reasons are many; the original need may no longer exist, they may need to eliminate expensive premium payments, or they just need some additional liquidity to help with medical costs and retirement needs. There could be a better way... 

A life settlement is the sale of an existing life insurance policy for more than the cash surrender value and less than the death benefit.  

Five Common Life Settlement Scenarios:  

  1. Funds needed for LTC (Long-Term Care) expenses - At age 80, Maria moved into a long-term care facility, relying on her adult children to help pay her LTC expenses. She sold her policy and used the proceeds to relieve the financial strain on her adult children, who had previously sacrificed their own planning needs to fund her care. Maria said, “For the first time in years, I feel like I have my dignity back.”  
  1. Running out of money in retirement - At age 87, Carlos was living longer than expected and running out of money in retirement. Escalating premium payments were becoming too much of a burden to maintain and draining cash that could be used for other needs. “The life settlement gave me the ability to maintain my lifestyle in retirement.” 
  1. Retiring business owner - James was negotiating the sale of his business and discovered that his term policy owned by the business could be transferred to him. Once he became the owner of the policy, he explored a life settlement. “My wife and I now have more money to enhance our retirement lifestyle.”  
  1. Policy no longer needed - Judy and her husband (now deceased) had been making premium payments on their life insurance policy for over 30 years. Over time, the original need for the policy no longer existed. “I was able to uncover additional value over the cash surrender value. At my age, found money is a blessing.”  
  1. About to surrender their policyMike and Sharon were about to surrender a life insurance policy they no longer needed. “Talk about a win-win! We not only eliminated annual premium payments, but we also received a large cash payment from the life settlement.” 

Who has the best chance of qualifying for a life settlement?  

Anyone age 65 or older who has developed health issues since their policy was issued and owns a universal life or convertible term insurance policy has a high probability of benefiting from selling their policy. Policies with a death benefit of $250K or more can qualify. Even policies used in estate planning and business protection with death benefits from $2M - $100M can qualify. Younger policy owners with serious chronic illnesses can also explore the life settlement option. There are many scenarios where a client could qualify for a life settlement.  

PRACTICE TIP: Never surrender a life insurance policy without first checking for life settlement value! 

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. Contact us today.