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Competent Evaluation of Life Settlement Options.

Nels GriffinNews

How to fund long term care

Having a dynamic and up to date understanding of life settlements is vital for financial advisors.

There are varying circumstances where life settlements may be beneficial for clients, but one size does not fit all.  It is important to remember that not all clients that want a life settlement may qualify.  In addition, life settlements may work well for some clients but not be an appropriate option for others.

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The dynamics to keep in mind are that the two most important metrics that influence the viability of a life settlement are the health of the client, and the expense to keep the life insurance policy in force.  For example, someone that is 65 and healthy may not qualify.  Typically, life insurance providers work with clients with a life expectancy of less than 15 years.  In other instances, the nature of the insurance policy may make it cost prohibitive due to high premiums, or disqualified due to lack of conversion options from a term policy.

the two most important metrics in a life settlement are health, and policy expenses

Additionally, it’s vital that advisors help their clients explore the tax implications of a life settlement. Although lump sum life insurance payouts can be tax-free for the beneficiaries, in some instances life settlements are not. Depending on estate planning dynamics, this could affect the viability of a life settlement.

Ultimately the more advisors educate themselves about life settlements, the better equipped they will be to assist their clients in recognizing the value of these powerful financial tools.  The majority of clients are unaware of the potential value of their life insurance policy, and reaching out to them with useful information can enhance the value of the advisor in the eyes of clients.

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.