Surprising Incentives for Financial Advisors and Life Insurance Agents Offering Life Settlements

(4 Minute Read)

The business of life insurance seems pretty well defined for both those who purchase life insurance and those who sell it. But, the reality is, life insurance isn’t quite as clear a picture as once believed. In fact, many people don’t know that legislation in the early 1900’s deemed life insurance an asset that can be bought and sold just like a house or a car. Ultimately, this means that for those who’ve purchased life insurance who no longer need it, there’s an opportunity to sell and find some financial liquidity. For financial advisors and life insurance agents there are also many advantages in both reputation and bottom line. The following list breaks down these perks.

Reputation Advantages

When a financial advisor or life insurance agent has knowledge of life settlements and actively works to offer them they’re taking a crucial extra step for their clients. Not only are they fulfilling their fiduciary obligation to help clients dispose of an asset they no longer need, they’re building trust and confidence with the client. Turning a non-liquid asset into cash can make a world of difference for your clients’ lifestyles and security.

Also, creating this financial liquidity for your client might mean you’ve given yourself an opportunity to help your client grow this sum through thoughtful investments.

Financial Advantages

Although first and foremost, your fiduciary responsibility to your client is your priority, it’s nice to know that you’ll be compensated for the work you’re doing towards your clients’ best interests. With life settlements, you’re potentially looking at several opportunities for compensation. First, you’ll continue to receive renewal commission on the policy if you were the original writing agent. Also, you’ll receive a commission on actual sale of the policy to a new owner, and if the policy needs to be converted from term to universal life insurance, you’ll be paid on that conversion.

After the conversion and sale of a term policy, your client might again want to invest the proceeds to bridge the retirement gap. However, if they’re nearing the end of their life, there are still options out there that might be beneficial to them. For example, annuities, or a long-term care policy.

If you’re a financial advisor or life insurance agent, you have a sense of which of your policy holders may no longer be in need of their policy. In these cases, your client may be struggling with paying increasing premiums or they simply no longer need the policy and when they lapse, the policy will no longer have value. But, when a life insurance agent works with a life settlement company to sell a policy, they have an opportunity to turn that instance of potential lapse into revenue for both themselves and their policy holder. It’s as simple as a phone call to a well-known and trusted life settlement company

Knowing the ins and outs of the life settlement market isn’t necessary to get started providing life settlements as a financial advisor or life insurance agent. With the right partner, it’s easy. Finding that partner means looking for someone who provides resources for both you and your clients, someone who’s on demand and ready to answer questions like “What is a viatical?”

Life Settlement Advisors understands these needs and is happy to be of service. If you’d like to learn more of the specifics of providing life settlements, download our handy e-book, Serving Senior Clients: Turning High Life Insurance Premiums into Financial Liquidity.

Case Study:

Henry owned a $500k term life insurance policy he purchased 9 years ago. Henry no longer needs the policy as he sold his business and planned to let it lapse. His insurance agent informed Henry that the policy may have value due to the fact the policy was convertible. Henry sold his policy for $55,000 and used the proceeds to purchase long term care insurance.

Leo LaGrotte
llagrotte@lsa-llc.com
317-863-5936

Download our free resource, Serving Senior Clients, for more information about how you can unlock a powerful new source of financial liquidity for your clients today.

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