June, an 84-year-old widow, saw something in a television ad that piqued her interest. After husband Frank passed away two years ago from a long battle with heart disease, June found herself in an assisted living facility, burdened by mounting medical bills. While knitting a baby blanket for her new great-granddaughter one afternoon, a captivating commercial flickered across her TV screen, promising relief from her financial worries. It touted the option of selling her life insurance policy for cash through something called a life settlement. Intrigued, she set aside her knitting and jotted down the contact information.
Why did June consider a life settlement? As June pondered the possibility, she realized she no longer had a pressing need for the policy. Her children were grown and financially stable, yet she was still shelling out hefty premiums to maintain coverage. "Why not explore this further?" she thought. With a simple phone call to the number from the commercial, June received a cash offer of $75,000 in less than 48 hours. The offer was three times greater than the $25,000 cash surrender value of her policy.
The offer seemed almost too good to be true, stirring both excitement and unease within June. She felt pressured to make a quick decision and was unfamiliar with the company pushing the deal. Was she being targeted by another financial scam aimed at unsuspecting seniors?
Seeking clarity, June turned to her trusted advisor, Michael, who assured her it wasn't a scam but urged caution. He explained that many direct-to-consumer marketers aim to purchase policies at a steep discount, prioritizing their interests over the sellers'. Instead, Michael suggested consulting a life settlement broker with a fiduciary duty to secure the best deal for June.
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.
Though the process took longer than the initial 48 hours, June felt no pressure to rush, and the outcome was beyond her wildest expectations. The auction yielded 14 separate bids, with the winning offer coming in at a staggering 19 times higher than the cash surrender value. What's more, the winning bid came from the very same buyer who had initially offered her only three times the cash surrender value. The key to this remarkable outcome? The competition created by the auction process, coupled with thorough underwriting, uncovered the true value of June's policy.
The moral of the story is clear: Seniors should exercise caution when tempted by direct-to-consumer life settlement ads on TV and social media. Instead, entrust their interests to a nationally licensed life settlement broker like Ashar Group, ensuring they receive the best possible outcome.
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.
This post is part of our series for advisors to pass to their clients. Aging doesn’t have to be scary, and we here at Ashar want to help you provide the resources that policy sellers need to flourish in this chapter of their life.
We all want to know that when our time comes, our family and loved ones will be provided for. After all, that’s the point of buying life insurance: so that when we pass away, our dependents will have some money to fall back on, to help cover any expenses or taxes and maintain their standard of living. (more…)
This post is the fourth in our series of continuing education resources for advisors. The life settlement industry is complex and we here at Ashar want to make it easy for you and your client to navigate this complicated field.
Stock market volatility is generally a cause for nervousness among financial advisors, if not outright concern. But, as with most things, there is a silver lining: an uncertain stock market can drive investors to put their money into other assets that aren’t connected to the vagaries of Wall Street. (more…)
It’s not unusual to hear about a policyholder who abandons or cashes in their life insurance policy without first checking for its fair market value.. If they had appraised their policy, many would have found out that it could have been worth far more in the Secondary Market than what they received by simply letting the policy lapse or cashing it in with the insurance carrier that issued the policy.
Those familiar with the Secondary Market know that obtaining the best value for a life insurance policy doesn’t always come from the issuing company, and having a Secondary Market Valuation, SMV®, not only provides up to date information about what the policy is worth, it also can mitigate liability for trustees and fiduciaries that might have unknowingly surrendered or lapsed policies for minimal value.
The results can be life-changing and provide liquidity for retirement, caregiving, and lifestyle needs.
So what must an advisor and client do to ensure the best possible outcome? First, evaluate all options available to the client, including a life settlement. Next, work with a firm such as Ashar that is licensed to advocate on your client’s behalf. Their responsibility is to analyze the client’s probability of receiving an offer for their policy in the Life Settlement Secondary Market and guide the client and advisory team efficiently through the process, while minimizing potential pitfalls. A licensed broker, such as Ashar, is aligned with the client’s interests and will negotiate with their established institutional funding relationships to secure the best offer possible for your client’s policy. The goal is to facilitate a formal negotiation between institutional buyers and obtain multiple offers through this competitive bidding process.
By following these steps, you’re helping to ensure that your client is being dutifully represented, while you protect your reputation and limit liability. If you have any questions about the Secondary Market, please call us at 800-384-8080.
The Secondary Market for Life Insurance is a global market with a variety of institutional investors. It is comprised of private equity, pension funds, reinsurers and global banks. In a life-settlement transaction, a policyholder sells an existing policy for an amount higher than the cash surrender value, but less than the death benefit. The new owner pays the premiums and collects the death benefit when the insured passes. This is a win-win for both parties. Similar to a structured settlement or lottery buyout, the consumer receives a lump sum today and the institutional investor, such as the pension plan, can meet their future obligations.
Due to the complexities of the transaction, it is imperative to secure the services of an experienced and knowledgeable licensed broker to facilitate the case design, negotiation and closing process.
If you are considering valuing your policy, talk to a secondary market advisor such as Ashar Group who can guide you through the process. You can also go to https://ashargroup.com/policy-value-questionnaire/ to help you determine if your policy may qualify for a life settlement.
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Turn your Term Life into Cash
The Secondary Market has become a safe and regulated environment for policy owners to liquidate insurance policies that are no longer necessary due to changes in estate tax law.
Many people are looking for new ways to enhance their current financial plan, and one new alternative is the Term Transformer.
This unique opportunity offers an alternative for your clients who have a convertible Term Life Policy that is about to be surrendered or lapse. The Term Transformer is designed as a simple and effective way to convert a term policy into a cash settlement.
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Life Settlements can fund Retirement and Long Term Care
With an increasingly aging population, the Secondary Market’s ability to quickly generate liquidity from unneeded insurance policies is becoming more relevant each day.
To explore the benefits of the Secondary Market, seniors can get a SMV®, Secondary Market Valuation, on their policies through their advisors. With an SMV® advisors have valuable information about the fair market value of the policy when helping clients make informed decisions regarding financial challenges.
The Secondary Market has changed the way we think about life insurance and planning, and cannot be overlooked for a family, individual or business entity who are contemplating any change in a life insurance policy. Before the emergence of the Secondary Market for life insurance, individuals with impaired health were unable to receive additional consideration above and beyond the cash surrender value.
Now, that same individual may be able uncover additional value by selling a policy in the Secondary Market. The Secondary Market also provides seniors a liquidity option when stock portfolios are still recovering and insurance premiums are still high or increasing.
In general, policyholders who benefit most in the secondary market are over 65, are not terminally ill, and have a life expectancy out to 15 years. Their policies would have face amounts of between $100,000 and $50,000,000 and must be at least two years beyond the policy issue date.
If you think it would be prudent for your client to consider alternatives like the secondary market, talk to an Ashar specialist. You can also 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.
Ashar’s proprietary SMV®, Secondary Market Valuation, is a unique analysis performed by Ashar Group to assess the fair market value of a life insurance or annuity asset for planning purposes. How does this help your customers?
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A life settlement is a financial transaction that enables a policy owner to appraise and sell their life insurance policy. Similar to a piece of real estate or other valuable assets, the client can sell their policy to a third party for an amount higher than the cash surrender value, but less than the full death benefit.
