Why Producers Let Clients Miss Out on Life Settlement Opportunities

To transact a life settlement or to surrender a life insurance policy is an important, complex and irrevocable decision. But too many producers are failing their clients by forcing them to negotiate these waters alone. And quite importantly, a life settlement is a time sensitive transaction -once the policy lapses, the settlement opportunity is gone. Clients need to be made aware of a life settlement as a lapse alternative before it occurs and no one is in a better position to make that happen than their insurance advisor, whose responsibility should be to educate them on this relatively new transaction.

Producers shy away from life settlements for largely two reasons: 1) their unfamiliarity with the transaction and 2) prohibitions imposed by their primary carrier. The first reason can be remedied by education and working with a reliable life settlement broker. The second reason will ultimately fall away as producers who fail their clients are increasingly subjected to malpractice suits and as more states enact laws requiring insurers to disclose to seniors that there are other options to lapsing or surrendering a policy.

Producers who fail to educate themselves and their clients about the opportunity presented by a life settlement are not only guilty of letting their clients down, but also shortchanging themselves. Clients who are not well-served by their insurance advisors are increasingly finding other alternatives, whether that’s going direct to a provider or seeking out an advisor who will help them with a settlement. As the life settlement market grows, consumer awareness is already increasing and those consumers may well replace their insurance advisors with someone who is willing and able to look out for their best interest.

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