$112 Billion in Lapsed Policies – Are You Missing Out?

Even as the life settlement market grows, seniors continue to miss out on a massive amount of unclaimed money from lapsed life insurance policies. Darwin Bayston highlighted in a recent article that over 250,000 universal and variable universal life insurance policies with a face value of nearly $57 billion were lapsed by seniors over the age of 65. When adding term and whole life policies, the figure skyrockets to over one million policies, totaling $112 billion.

It is unfortunate that many seniors are unaware of the option to convert an unwanted or unneeded life insurance policy into cash through a life settlement. Not every policyholder is a suitable candidate for a life settlement. Similarly, some may not even be interested in selling their policies. However, a 2010 survey revealed that 90% of seniors who had already lapsed their policies would have considered selling them, had they known it was an option. This shows a significant gap in awareness and education about life settlements.

One issue is that trusted advisors, who seniors rely on for financial guidance, are often uninformed or misinformed about the life settlement market. Stephen Terrell explained that advisors’ hesitations about life settlements are often unfounded. These transactions are not shady deals; the life settlement industry is regulated and closely monitored by state insurance departments. It is a secure and viable option that can provide cash for other, more profitable investments.

There is a tremendous amount of value in life insurance policies that is essentially going to waste. If you or a client owns a policy that you no longer need or can afford, see if you qualify for a life settlement. This option could turn a lapsed policy into a much-needed financial resource. Life settlements offer a way to unlock hidden value and convert it into immediate cash. This can help manage current financial obligations or fund other investments.

The life settlement process itself is straightforward. Policyholders sell their policies to investors for a lump sum of cash, who then assume the premium payments and become the beneficiaries. When the insured passes away, the investors receive the death benefit. This alternative can be beneficial for policyholders who no longer need or can afford their insurance. It provides immediate financial relief without the burden of ongoing premium payments.

Many seniors are unaware of life settlements due to the lack of information. Financial advisors play a crucial role in bridging this information gap. It is essential for advisors to stay educated about life settlements to offer comprehensive advice to their clients. A well-informed advisor can help clients make better financial decisions, potentially converting a lapsed policy into a valuable asset.

The market for life settlements is growing, and regulatory measures have made it more secure and reliable. More seniors should explore this option if they are considering letting a policy lapse. By understanding and utilizing life settlements, policyholders can avoid wasting the potential value in their life insurance policies.

For our part, we strive to be a source of confidence and assurance for our clients. We aim to educate about the life settlement process so informed decisions can be made. We believe that every policyholder should know their options and have the necessary information to make choices that best suit their needs. By offering detailed insights and free quotes, we ensure that clients have all the information they need to decide if a life settlement is right for them.

If you are considering a life settlement or have questions about the process, we are here to help. Our goal is to provide clarity and support to ensure you make the best choice for your financial future. Reach out to us for a free quote and see how much value you can unlock today.