What every advisor needs to know about life settlements

Perhaps we should collectively think of education as our responsibility to provide a "social good" to our senior population.  There is much discussion among professional groups about fiduciary responsibility.  While technical, legal and regulatory definitions differ, one guideline may be our own common sense.  A guiding principle might be that all of us who are serving the senior population in some manner of advice and counsel should know as much as we can about all of the investments that make up their portfolio — including their life insurance policy. 

Advisory groups, as well as financial advisors and planners, producers and agents, attorneys, CPAs, and trustees need to challenge ourselves to work together to educate and serve senior consumers.

Just as important, life companies could and should play a role in making their policyholders who are considering lapsing a policy aware about the options available. While life carriers are in the business of generating profits, they should give careful analysis of the minimal impact that policy lapses most likely would have on their financial condition, as compared to the valuable contribution and service they could provide to their senior policyholders. The benefits to joining in the efforts to educate their senior policyholders about all the options available before lapsing a policy should outweigh their primary goal of maximizing profits.   

The more a consumer knows, the more well-equipped they are to make a decision that could positively impact their future. And the more their advisors know, the better they can ensure they take advantage of all options to benefit their future.