(2 Minute Read)
Even as awareness of the life settlement market grows, seniors still miss out on an astounding amount of money from lapsed life insurance. In a recent article by Darwin Bayston, he highlights 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. That’s almost unbelievable on its own, but it gets worse. If we throw term and whole life policies into the mix, the number of policies jumps to over one million, and the face value increases to $112 billion. Bayston notes that these figures were calculated in 2008. If we had the data from more recent years, these numbers would likely be even higher.
Frankly, it’s sad and appalling that seniors aren’t made aware of the option to turn an unwanted or unneeded life insurance policy into cash in a life settlement.
Of course, not every policyholder would be a good fit for a life settlement, and others still may not even be interested in selling their policy. However, as Bayton notes, a 2010 survey revealed that 90% of seniors who had already let a policy lapse would have considered selling it, if only they had known it was an option.
In many cases, seniors aren’t made aware of the life settlement option because their trusted advisors are either uninformed or even misinformed about the life settlement market. In an article by Stephen Terrell, he notes that the hesitations advisors have about life settlements are often unfounded. These are not back alley dealings. The life settlement industry is regulated and scrutinized, and state insurance departments monitor every transaction. It’s a safe, viable option that can provide money-in-motion for other, more lucrative investments.
There is so much value in life insurance policies that is going to waste. If you or a client has a policy that you no longer need or can afford, I encourage you to see if you qualify for a life settlement by using our qualification calculator.