As a licensed advisor, optimizing your practice is essential. One vital aspect might be your fiduciary responsibility to present life settlements as an option to your clients. A recent study indicated that 90% of seniors who allowed their life insurance policies to lapse would have selected life settlements if they had been aware of this option. The ramifications of a lapse not only impact the client and their beneficiaries but also pose a considerable risk to you, the advisor. Lawsuits against advisors failing to show alternative exit plans are increasingly prevalent.
Consider this scenario: A 79-year-old widower receives a notice that the premium for his $250,000 Universal Life insurance policy will surge by over $300 monthly. Uninterested in paying the increased premium, he also fears losing his coverage for merely the cash value.
When the client consults his advisor, he’s told of two options. He can either reduce the policy to $100,000 and maintain his original premium, or surrender the policy for $9,000 in cash value. Seeking a second opinion, the client learns his policy might qualify for a life settlement. Pursuing this route, he receives $30,000 for selling his policy with another agent. This extra money allows him to invest in an annuity. Subsequently, the client dismisses his original insurance agent.
Life insurance policies often go unutilized as clients let them lapse. Studies reveal that 55% of seniors have already lapsed a life insurance policy. Another study noted that 79% of clients believe advisors should inform them about the life settlements option. Despite these statistics, many advisors fail to educate their clients about it.
Advisors, understanding life settlements could significantly enhance your practice. By informing clients about life settlements, you show them a viable financial option. This helps maintain your role as a fiduciary and averts any legal risks associated with non-disclosure.
Presenting life settlements as a choice elevates your role from a mere advisor to a trusted partner in your client’s financial journey. Clients prefer advisors who can offer a full spectrum of financial possibilities. They appreciate your effort in suggesting options they might not have considered previously. This proactiveness in your advisory services results in stronger, trusting relationships.
It is crucial to understand the broader implications of a life settlement. Clients converting their policies can gain considerable cash, often much more than the surrender value. This additional money can be invested or saved, providing financial security. As an advisor, provide balanced advice that aligns with the client’s long-term financial goals.
While life settlements offer substantial benefits, they may not suit everyone. Ensure you evaluate each client’s financial situation meticulously. Discussing with clients openly about their options, including potentially surrendering or selling their policies, underscores your commitment to their financial well-being.
Life settlements have changed the landscape of financial advising. Advisors must stay updated about new pathways to financial stability for their clients. This knowledge equips you to offer the best advice, strengthening your reputation and trustworthiness.
We provide comprehensive tools and resources to help advisors excel in offering life settlement options to their clients. Our platform connects you directly to a vast network of global buyers, ensuring that you receive the best offers for your clients. By eliminating broker commission splits, we help you maximize client value. Detailed policy appraisals quickly determine if a policy qualifies for a life settlement and the potential value it could sell for.
With our dedicated support, advisors can provide top-tier services to their clients. Together, we can ensure that every client is informed about their options and can make the best decisions for their financial future. Our expertise and dedication to transparency foster a trusting relationship between advisors and clients, ultimately leading to better client satisfaction and loyalty.
