Close Close

Life Health > Life Insurance

Working with advisors: The good, the bad and the ugly

Your article was successfully shared with the contacts you provided.

Many of the best life settlement cases come by way of a referral to an insurance agent from an accountant, attorney or trust officer.  Working with advisors can often generate a steady stream of prospects for new life, long term care, disability income and medical insurance, in addition to life settlements.

Commonly, advisors, like accountants, attorneys and trust officers become the primary trusted member of a client’s financial team.  Forming a relationship with an advisor brings you instant credibility with their referrals.  

Advisors become receptive to your ideas and count on you to keep them up to date on insurance developments so they’re are not caught off guard by someone else. 

For example, making sure they know there is an alternative to lapsing or surrendering a life insurance policy gives them additional information to help their clients maximize the value of their assets.  This give-and-take becomes the basis for a good relationship and, most importantly, benefits the client.

Where can things go bad?  Frequently, advisors know:

who is retiring

who is getting divorced

whose spouse passed away

who is in financial trouble

who is selling a business

who can’t afford their insurance

who has a need for additional income; and

who needs funds to pay for long term care. 

All these circumstances can trigger the lapse or surrender of a life insurance policy.  Unfortunately, that happens too often before the option of a life settlement is investigated because so many advisors are not even aware that life settlements exist. 

It’s bad because at a time when the additional money could make a meaningful difference in their lives, people are missing out on an important opportunity that could generate hidden value from their insurance.

When do things turn ugly?  Sometimes an insurance advisor is aware of a change in a client’s financial circumstances — a change that would make a life settlement an attractive option. 

The client may be excited to learn that their policy is worth more than they thought, but elicits a second opinion from their accountant or attorney.  If you do not have a relationship with the other advisor, but someone else does, the advisor’s response to the client could be, “I can handle that for you with my guy.”

You could be pushed out of the transaction, though you were the one who came up with the idea and got the client interested in the first place.  That’s ugly!

So how can you promote more good for your clients, for their other advisors and for you?  By making sure that you inform as many accountants, attorneys and trust officers as possible about life settlements and who makes a good candidate. 

This way, everyone wins:  the advisor looks good to their clients. The advisor seeks you out to work on life settlement transactions. And most importantly, the clients get more money at a time when they really could use it. 

See also these articles by the authors:

4 cases that show how life settlements have bounced back

Life settlements and insurable interest: the historical basis

Delivering a death claim or life settlement check



© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.