Top 5 Things You Should Avoid When Assisting Life Settlement Clients

Top 5 Things You Should Avoid When Assisting Life Settlement Clients

Financial advisors are coming under increasing pressure to recommend life insurance settlement as part of their advice to clients. It’s estimated that at least 90% of seniors who have already lapsed a life insurance policy would have considered a life settlement if they were given that option. It’s the job of the financial advisor to provide this information to their clients. Surprisingly, only 35% of all financial advisors have done this. This is clearly an issue. There are many benefits that come with a life settlement and it’s the job of financial advisors to ensure that their clients enjoy these benefits.

However, even as you advise your clients on the possibility of a life settlement, you must avoid the following things:

Do Not Over Sell It

There’s no doubt that a life settlement can be beneficial for seniors. But you need to be very clear on what kind of benefits they will get and how those benefits compare if they decided to let the policy lapse. Do not promise the moon. Do not promise to uncover the best asset ever. Just be simple in your explanation and objective with the facts.

Premiums Must Be Paid

The value of an insurance policy can only be good if the agreed premiums are paid. Until the policy ownership is changed officially, it’s your client responsibility to pay the policy premiums. This ensures that the value of that life insurance plan is retained.

Don’t Work With the First Life Settlement Broker You Find

There are many life settlement brokers in the market yet not all of them will offer you the quality of service that you are looking for. Make sure the settlement broker is authorized by the Life Insurance Settlement Association. They also need to have some experience in this area and a list of previous settlements that they have done. Life insurance settlement can be a very complicated process and you want someone who knows their way around this.

Not Being Upfront

Do not hide anything from your client. If you are going to transact a life insurance settlement, everything needs to be clear. There are very specific disclosures that must be granted to anyone who has an interest in buying the policy. Key facts about the settlement and what it means for the policyholder must also be presented. It’s better to be transparent in order to ensure the transaction is legitimate.

Get It Done As Fast As Possible

The transaction of a life settlement involves many things. There are very specific documents that will be required, signatures to be appended and other transactional details. They must be done as fast as possible. This will ensure that the policy buyer has enough time to finalize the deal based on current terms. It also ensures that your client gets the payment quicker.

Advising your clients to take up a life settlement cover is the right thing to do at the moment. The benefits are simply outstanding. The simple tips above will facilitate all financial advisers to ensure this option is explored to the benefit of their clients.

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