As a financial planner or CPA, you know better than anyone what your clients’ financial needs are. You need to be able to assist your clients in understanding the value of all of the assets in their portfolios. A life settlement is a financial tool that adds value to life insurance and provides new financial options for your clients. It’s important that financial planners and CPAs who are serving affluent seniors or corporate clients have an understanding of life settlements and their potential applications.

For senior clients, a life settlement is a great way to improve upon an estate plan or to fund a charitable giving program. In the case of a charitable gift, your client could receive a substantially larger tax deduction when utilizing a life settlement. Other life settlement applications include allowing your client flexibility for other investments and freeing cash for emergencies or anything else for which they might see fit to use it.

You also will want to be aware of the business applications for life settlements. Most business owners have life insurance policies to protect for the loss of key employees, fund buy-sell agreements, fund executive benefit plans, and/or secure loans. However, when these needs no longer exist due to retirement, change of ownership, or other factors, what happens to the policies? Unfortunately, many times these policies are surrendered or allowed to lapse because they are no longer needed and considered to have little or no value. This is especially true when term insurance is used for these purposes. As a financial planner or CPA advising businesses, you can help your clients discover that this asset may actually have real value in the secondary market.

While the scenarios are many, they share a common denominator: a true financial professional must be fluent in life settlements, both in the fundamentals and the options they represent.

The number of seniors turning to life settlements is increasing at an unprecedented rate. Though that should come as no surprise when you realize that they provide seniors with a level of liquidity that will often far exceed the policy’s cash surrender value.

Contact us directly to learn how we can work together as a team on behalf of your clients.