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April 01, 2007 at 04:00 PM
While most new products would likely inspire agents to check their client list for a suitable buyer, players in the life settlement industry say agents should take a more passive stance on getting clients to sell a life policy.
“That’s exactly what agents should not be doing,” said Robin S. Weinberger, a life settlement brokerage specialist with Advanced Planning Services Inc. in Boston. Life settlements, she said, should be viewed as a reactive rather than proactive business in which agents raise the prospect of selling a policy in response to a client expressing willingness to surrender their policy or let their coverage lapse.
Life settlements, according to Weinberger, are an “incredibly unique phenomenon” that can provide a significant opportunity to policyholders, but agents shouldn’t go looking to find settlements. Instead, she said, when a client has a policy he wants to surrender or let lapse, “that’s the time for an agent or broker to step in” and offer to have the policy appraised.
One instance in which an agent could plan ahead to a degree, she noted, is with term policies. When a term policy is coming up and there’s an option to continue it, “that’s the time to call your client,” she said.
Another area in which agents could be more active on life settlement without raising concerns about stranger-originated life insurance, she said, is by speaking with accountants and trust officers. “They’re the ones who are going to know who’s got the big policies that they are going to let lapse or surrender,” she said.
Bob Nelson, vice president and life and estate planning division manager for the Grace/Mayer Insurance Agency in Omaha, Nebraska, is doing just that. Nelson said he initially set up shop with Grace/Mayer “to serve as a resource” for attorneys, accountants and trustees in the area.
“I try to be somebody who law firms and accounting firms can go to” for counsel on life settlements in general and potential transactions, he said.
“I don’t think I would go back into my database and scavenge my list” to find potential life settlement candidates, Nelson said. Rather, he explained, life settlements should be a “tool” that agents can make use of when the situation calls for it.
