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November 17, 2022 at 01:48 AM
What You Need to Know
- Clients have been selling life insurance policies to investors for more than 20 years.
- One common client objection is… murder.
- The authors contend that the real threat to your clients is… loss of policy asset value.
It is a fact that lack of consumer knowledge can mean missed life settlement opportunities.
Each year millions of policies get lapsed or surrendered without ever being evaluated for a life settlement, often because the consumer is unaware that the industry even exists.
This lack of knowledge leaves millions of dollars on the table.
But that is not the only way that consumer ignorance of life settlements impacts our industry and, even more meaningfully, it affects individuals.
An Example
Here’s an example how lack of knowledge played a key role in a case this month:
A recently widowed, relatively healthy 76-year old with a $500,000 universal life policy felt she could no longer afford the premiums.
She had no children and therefore no real need for the coverage.
The client had never heard of a life settlement, but her astute agent brought us this case to evaluate.
We were able to obtain an offer of $100,000 for the policy which had a cash surrender value of about $20,000.
Some Stranger
In an unfortunate case of the “blind leading the blind,” during the bidding process the widow mentioned the life settlement idea to one of her nieces, who also never heard of a life settlement.
The niece put a scare into the widow by remarking that, “I wouldn’t want some stranger benefiting from a life insurance policy on my life!”
We don’t hear this objection very frequently anymore, but it came up quite often about 20 years ago in the early days of life settlements. Back then, it was a reasonable concern.
Robin S. Weinberger, CLU, ChFC, CLTC, is the director of national accounts for Life Insurance Settlements Inc. She has been a general agent and director of national accounts for Connecticut Mutual and vice president of marketing for Sun Life of Canada. She can be reached at 