We've recently received an uptick in calls from insurance agents asking about life settlements. What is interesting about many of these calls is that they are coming indirectly from consumers: The agents' clients called to ask about life settlements.
Fortunately for both, the policy owners had heard about life settlements. Otherwise a significant opportunity might have been missed.
As an agent you may be negligent if, when clients call asking how to cancel or surrender a policy, you don't tell them about the life settlement alternative. What if they do cancel or surrender and then find out that you didn't make them aware of the secondary market for life insurance?
Shouldn't you be educating your clients? What about the attorneys, accountants and trust officers they work with? Shouldn't you be educating them, too?
Here are a few recent cases that easily could have gotten away.
Case #1: Male, age 59, with pancreatic cancer
This individual had a $500,000 term policy that was at the end of the level premium paying period and the conversion period. Unfortunately, due to the extra expenses this devastating illness caused, he could not afford to convert the policy; and he needed additional cash.
His agent suggested that, before lapsing the policy, he investigate the availability of a life settlement. His life expectancy came in at 72 and 24 months. We got him a net offer of $320,000, a life-changing amount for a man and his family in this tragic circumstance.
Case #2: Male, age 75, in standard health
The insured had a $300,000 term policy that was also at that end of the level premium paying period and conversion period. When he called his agent to drop the policy because he no longer needed the coverage, the agent said, "Before you do, let's see if there could be value in the secondary market." We had recently done another case with this agent and so he was aware of the possibilities.
When he called, he said, "I know this is a longshot, but do you think there could be any value in this policy?" The insured's life expectancy came back at 180 months. After an extensive search, we got $5,000 for the client. Both he and his wife were thrilled. To them, this was "found" money.
