In a nutshell, your client can have some serious health issues that disqualify them for new insurance but still have a relatively long life and therefore not qualify for a life settlement. It's because insurance carriers are underwriting different risk factors at policy issue compared to institutional buyers who purchase existing life insurance policies.
Likely, you discuss real estate, trusts, businesses, retirement funds, and other equities with your clients at length. But what about their life insurance policy? But what about their life insurance policy? Life insurance policies are assets, but not everyone thinks of it that way. This is why seniors leave such huge amounts of money on the table through lapsed or surrendered life insurance policies.
Michael contacted Ashar Group, a reputable firm specializing in appraising life insurance assets and facilitating life settlements. With Michael's guidance and Ashar Group's expertise, June embarked on a journey to maximize the value of her policy. Together, they compiled compelling information to present through the policy auction, where multiple buyers would compete for the opportunity to purchase her policy. Just like in a real estate bidding war, this competitive environment drove up the value of June's policy.
With retirement evolving significantly in recent decades, longevity has become a critical element of financial planning. With people living longer, continued inflation, and rising healthcare costs, outliving one’s retirement plan is a real concern. This is why addressing health, longevity, and long-term care must be an integral part of every retirement planning session with senior clients. Here are some ways to initiate these important conversations.
The aftermath of COVID-19, the rise of AI tools, and new regulations are transforming how consumers engage with life insurance. Many of the largest wealth management and investment firms now offer independent consultative platforms for financial advisors and Registered Investment Advisors (RIAs) to partner with firms that specialize in services outside their wheelhouse—like longevity analysis and valuation of life insurance assets. It can be a valuable tool for planning firms aiming to thrive by providing comprehensive solutions. Whether preventing financial disaster or optimizing asset allocation for high-net-worth families, the life settlement market can be crucial in comprehensive financial planning and business growth.
Seniors should exercise caution when tempted by direct-to-consumer life settlement ads on TV and social media. Instead, entrust their interests to a resource that ensures they receive the best possible outcome. Don't let every day feel like April Fool's Day—empower seniors to make informed decisions about their financial future.
These fast twitch muscles keep us from falling and breaking something as we age. They allow us to keep our balance if we slip on something or step off a curb without noticing the drop. They allow us to quickly apply the brakes to avoid a catastrophic fall. After the age of 70, if you fall and break your hip, it could be fatal or, at minimum, be a long, painful recovery period that reduces your quality of life.
More than 9M policies lapse each year, and only about 3,000 life settlement transactions occur. How many more of those lapsed policies could have qualified for a life settlement – a buyout of existing life insurance for an amount greater than the cash surrender value and less than the death benefit? If only 1% of those lapsed could have qualified, that’s 90,000 policies resulting in billions to consumers over the cash surrender value.
Considering the financial landscapes many clients are navigating, here's an everyday success story that underscores the importance of valuing assets, particularly life insurance, in crafting comprehensive planning solutions. We recently worked with a client facing the challenge of an underfunded life insurance policy held within an Irrevocable Life Insurance Trust (ILIT). The policy, once thought to be a cornerstone of their estate plan, was underperforming and had become a source of financial strain due to rising premiums.
As retirement has changed over the past several decades, longevity has become a vital component of financial planning. With people living longer, continued inflation, and rising healthcare costs, outliving one’s retirement plan is a real concern. This is why a frank discussion about health, longevity, and long-term care needs to be part of every retirement strategy session with your senior clients.
