Universal Life Settlements
Universal life insurance often makes for a great option when purchasing permanent life insurance. Because of its premium flexibility, it can work for a wide variety of people, and provide them with the security they need in life. And with an adjustable death benefit, the insured has the advantage of getting the coverage they need, when they need it. And universal life policies do accrue cash value, albeit very slowly.
But in some cases, the insured may decide they no longer want or need the policy. Maybe the situation that called for it has passed, or they have found a more attractive option to fit their needs. In this case, an advisor would recommend surrendering the policy for its cash value. However, for universal life policies, this cash value usually isn’t very much at all.
Many advisors don’t consider a potentially more attractive option: a life settlement. This opportunity allows the insured to sell the universal life policy to a third party and receive a lump sum — one that could be 5 to 8 times greater than the cash surrender value. This option can provide greater liquidity in choosing other, more lucrative investment options.
If your client has a universal life insurance policy they no longer want or need, you can see if they qualify for a life settlement by using our qualification calculator.