In avoiding cliff, some may be over-insured

As it turned out, the last-minute deal kept and made permanent the $5 million exemption, marital deduction, portability and unified credit. Although the deal did wind up increasing top estate tax rates to 40 percent from 35 percent, the new rate is still preferential to the automatic top rate hike of 55 percent and the fixed laws provide some clarity for estate tax planners.

Page sees the sloppy legislative process and the uncertainty that it sowed among estate tax planners as an opportunity for the life settlement industry. Estate owners that have become over-insured may want to sell their policies and use the proceeds to plan more appropriately.

Although the outcome of the fiscal cliff negotiations may be an auspicious sign for the life settlement industry, Page cautioned that lack of education among financial planners was a huge obstacle for the industry.