Settlement Group

Do Financial Professionals, Life Insurance Agents, and Brokers have a fiduciary responsibility to inform their client’s on the benefits of a life settlement?

Well you may want to consider the following scenario:

Your client no longer needs his $1,000,000 life policy and would like to surrender the policy for its cash value. The client contacts you to start the transaction, you have a basic understanding of life settlements, but instead doing more research and talking to a life settlement expert, you assist your client in surrendering his policy for a total of $75,000. Sometime later your client is talking to friends at the country club and hears that their financial advisor got them over three times the surrender value for a similar policy.When your client asks, “Why wasn’t I given the option of a life settlement,” what will your response be?

If you had considered all of your client’s options you could have possibly gotten him $300,000 or more for his policy and had a very happy client.Instead now you have a disgruntled client or maybe even worse. Not only have you lost any future referrals or business from this client you may be at risk because of your knowledge of life settlements.

Life Insurance Agents/Brokers and Financial Professional have the opportunity to make available to their clients the benefits of the secondary market for life insurance. Life settlements are becoming commonplace.Why? Because the offers presented to your clients may be significantly higher than the current policy surrender value. In the past, policyholders had two options: surrender value, or let the policy lapse. Now you can offer your clients a third option – the sale of this value asset in the secondary market to the highest bidder.