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A Powerful Tool For Financial Advisors – Life Settlements

Nels GriffinNews

financial advisors

These powerful financial tools are often overlooked or misunderstood.  Learn how they can fit into your advisor’s toolbox.

If you are like many advisors when the subject of life settlements comes up ideas like confusing, unregulated, or just plain creepy may come to mind.  With any financial instrument, there are concerns that need to be addressed through proper research and education.  Most of the issues in the life settlement market are based on misconceptions or outdated information.  Financial advisors that educate themselves on the life settlement market will set themselves apart to their client base.

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financial tools

Expand Your Financial Awareness

The simple reality is that life settlements are another arrow in an advisor’s quiver of financial products.  When utilized in the proper setting they can free up client’s liquidity and financial freedom.  London Business School studies have shown historically life settlements provide an average of four times as much liquid capital as the cash surrender value offered by insurers.  With a staggering percentage of clients defaulting on their insurance premiums, life settlements offer a mechanism to capture potentially lost assets.

Regardless of the utility and power of life settlements the general lack of understanding or education dissuades many advisors from incorporating them into their financial tool box.  Recent surveys have shown that the most common reason advisors shy away from life settlements is lack of knowledge about these instruments.  What is not known or only vaguely understood is that the life settlement industry has went through a progressive metamorphosis over the past ten years.  Powerful customer protection regulation and standardization has transformed the market into a safe and flexible option for advisors and their client’s.

historically life settlements provide an average of four times as much liquid capital

Your Fiduciary Responsibility

As advisors, you have a fiduciary responsibility to make available a full spectrum of financial options.  It may be necessary to clear up any misconceptions you may have about life settlements, or to fill in any gaps in your understanding.  This will allow for both a comprehensive service for your clients, and open the opportunity for useful dialogue on how life settlements can fit into their financial plan.

Conversations of this nature are becoming increasingly vital as the life settlement market continues its growth and popularity.  The market for life settlements has been experiencing year over year growth of 20%-30% and it is expected to continue this trajectory as investors are seeking alternative strategies to diversify their portfolios.

As with any financial tool, the more advisors understand when and how to implement it effectively, the more useful it will become to their client base.

If you are looking for more information on how to work with life settlements feel free to contact us.

For a quick estimate of a clients policy value be sure to use our online life settlement calculator.