The secondary market for life insurance was responsible for transferring more than $12 billion in face value in 2008 according to industry estimates. Every one of these transactions began with a simple policy valuation recommended by a proactive advisor.

Policy valuation is a powerful tool. It gives advisors the ability to accurately assess the performance of a life insurance policy. More important, it is a great conversation starter. By simply asking the question “What is your policy worth?” advisors can open an entirely new dialogue with clients. A dialogue that can lead to significant new business.

Begin by pointing out to your client that a policy valuation is a simple and non-binding process. All that is required is a completed application, along with medical records and carrier illustrations. There is no cost, nor is there any commitment on the part of the client. Simply put, there is nothing to lose and, potentially, much to gain.

In the end, valuation lets you and your client walk away with a more accurate snapshot of their life insurance assets. At the very least you will discover that a policy is performing well and should be maintained. Or, you may find that a policy is worth far more than you previously thought. In which case, your client may well benefit from a reallocation of those assets through a life settlement or other secondary market transaction. Either way, your client wins because policy valuation gives them the information they need to make truly educated financial decisions.

For this reason, advisors should make policy valuation a part of any periodic portfolio assessment. Just as a client needs to know the current value of their stocks, real estate or business interests, they should also be aware of what their insurance is worth. Only then can you fully assess what opportunities exist for both you and your client.

Michael Coben is the Senior Vice President, National Distribution for Coventry.