(2 Minute Read)
Even as life settlements become more widely utilized, seniors are still missing out on an outrageous amount of money from lapsed life insurance. An article by Darwin Bayston</a > highlights that in 2008, nearly $57 billion worth of universal and variable life insurance policies were lapsed by seniors over the age of 65. That figure reflects the face value of over 250,000 policies let go by seniors. When term and whole life policies are added into the equation, the number of policies jumps to over one million, resulting in a total face value of $112 billion wasted when policies were allowed to lapse. Those figures were calculated in 2008, but if there was existing data in more recent years, their numbers would likely be similar or even higher.
When seniors make the decision to let a life insurance policy lapse, they surrender huge sums of money. What many of these people don’t know is that they have the option to turn an unwanted or unneeded life insurance policy into a larger upfront sum of cash through a life settlement.
While not every policyholder is a good fit for a life settlement, there are hundreds of thousands of seniors who are forfeiting their policies without understanding that they have an option that will provide them with upfront cash while still eliminating the expense of their policy’s premiums. Bayston notes that a 2010 survey revealed 90% of those seniors who let a policy lapse would have considered selling them had they known it was an option.
This shows us that seniors aren’t receiving adequate education about their many options during retirement. It also shows that their trusted advisors aren’t fully informed, or they may even be misinformed, about the life settlement market. In an article by Stephen Terell it’s noted that many hesitations financial advisors have with life settlements are unfounded. These deals are legal, legitimate, and often times a very viable solution for seniors facing financial burdens during their retirement. The life settlement industry is licensed and scrutinized, with state insurance departments monitoring every transaction made.
These lapsed policies are wasted opportunities for seniors who are looking for more money to pad their retirement fund or make more lucrative investments. If your client has a life insurance policy that is no longer needed, or the premiums become too much to bear, I encourage you to use our qualification calculator to see if you or your client qualify for a life settlement.
I would be happy to answer any questions you may have about life settlements or your client’s situation. I can be reached at 888-849-0887 or firstname.lastname@example.org.