Many producers are unaware that convertible term policies on seniors age 65 and above represent some of the best prospects for life settlements. Failing to take a look at these policies, before they are allowed to lapse, could be a significant missed opportunity for clients.
Term insurance is often bought for only a temporary need, and when that need passes, the policy may no longer be wanted or necessary. Also because term insurance premiums ultimately increase with age, many policies become unaffordable over time. A life settlement can benefit consumers by bringing a salvage value for policies that would otherwise terminate without value.
Here are a couple of examples of how we were able to help clients with term insurance. In one recent situation, a client had a $2.5 million term policy but could only afford to convert $1.25 million. Just before the end of the conversion period, we settled the other $1.25 million, which gave the client enough money to pay for the first few years of premiums on the coverage that he kept.