FINRA Consumer Bulletin Sheds Light on Life Settlements

FINRA weighs in on life settlements

While direct advertising has boosted consumer awareness, it has also created some confusion related to who represents the policy owner in a life settlement transaction. In the 07/31/2023 memo to seniors, “What You Should Know About Life Settlements”, FINRA has provided consumers with information that will help them understand how to protect their best interests and make informed decisions when considering selling their life insurance policy for more than the cash surrender value (CSV) and less than the death benefit. All types of policies, including convertible term insurance, may contain significant value beyond the CSV that can be monetized through a life settlement. According to FINRA, a life settlement might make sense if the policy is no longer wanted or needed - or if it's no longer affordable and the policy owner is willing to give up or replace the coverage. Even then, however, proceed with caution.

5 Key Takeaways about Life Settlements from the FINRA Bulletin

  1. Recommends consumers work with a financial professional to explore all non-forfeiture options, including a life settlement, so that you can help them make an informed decision.
  2. If you pursue a life settlement, make sure you get a fair offer. Ashar’s Compliance-Centric Life Settlement Platform includes a transparent auction process that forces competitive bidding among independent, licensed providers who buy policies in the secondary market. The competition created through the auction results in the best value for the policy owner/seller.
  3. Ensure the life settlement company selected is licensed to do life settlements and “consider using a life settlement broker that will shop the policy around on your behalf.” In November of 2007, the National Council of Insurance Legislators (NCOIL) adopted a revision of the Life Settlement Model Act that required provider and broker licensing. A licensed life settlement broker was assigned a fiduciary duty to protect the best interests of the policy owner/seller. By contrast, a licensed life settlement provider was designated to represent buyers/investors.
  4. Privacy protection. Ashar’s Compliance-Centric Life Settlement Platform leverages enterprise-level technology and information security procedures to protect sensitive client health and financial information.
  5. Don’t be pressured to make a fast decision. If you are involved with a life settlement company emphasizing speed, then they represent the buyer’s best interests, not the policy owner’s. Ashar's Best Interests Approach documents price discovery, bid transparency, and compensation disclosure.

Ashar Group and our FINRA registered broker-dealer relationship, Equus Financial Consulting, work together as an advocate for policy owners and advisory teams who are looking to access the life settlement market with a deliberate and conservative approach. The name Ashar was selected for our company at inception in 2003 as it was one of the 12 tribes from the bible that was known for being virtuous in its action and to “do what is right and you will be blessed.”

Ashar Group is a nationally licensed life settlement firm that protects 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, manage assets, or purchase policies. We are an independent resource for fiduciary advisors and their clients specializing in life insurance valuation for planning purposes.


Wealth Management Article - 2023 Mid-Year Outlook - Ashar Group

Rising Compliance Risks Of NOT Discussing Life Settlements - Wealth Solutions Report

Independent Representation - the Cornerstone of a Successful Life Settlement - Ashar Group

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