Life Insurance Settlements Can Help Sell New Life Insurance Policies

Wait? What? Life insurance settlements help sell new policies? How?

Life insurance settlements can be a good solution for clients that no longer want or need their life insurance policies, and can be a much better financial solution than lapsing or surrendering the policy. So, how can they help sell new life insurance policies?

We work with some advisors who consider a life insurance settlement a proactive financial planning tool, and a potential solution for clients in the future.

1) When a client needs a new life insurance policy, letting them know that a life insurance settlement is an option in the future, can help make the new purchase easier, knowing that there may be an opportunity to sell it and receive money, in case it is no longer needed.

2) When selling a term policy, researching which insurance companies have the most liberal conversion options is important. Convertible term policies are highly marketable in the life insurance settlement market. Advisors are looking to see which companies have the longest conversion options, because they know that the client will have more time and more options if the policy ever becomes unwanted.

For example, I recently spoke with an advisor met with a 65 year old business owner that needs a key person policy. He knew the client would only need a policy for 5 years, before he retired from his company. The advisor researched the conversion options from several different carriers, whose rates were similar, and called me. We discussed which of the insurance companies had the longest time before the conversion deadline expired, and which carrier had the best potential to have good conversion products in 5 years. This made the presentation easier for the advisor as he could explain to the client which insurance company he was recommending and why.

Discussing life insurance settlements at the time of sale of a new policy, educates clients that they have another option for their policy, if it becomes unneeded or unwanted.