Below you will find a link to a National Underwriter article published this week to which I was asked to contribute. It’s always interesting to see how an extended conversation is going to be boiled down to a handful of quotes. Fortunately, the gist of my comments came across accurately. However, there is a point where she shares my thoughts regarding the significant risk to a professional by not introducing the idea of a life settlement “… if, say, the client could get $70,000 for selling the policy versus only $13,000 for surrendering the same policy.” She is relating the upshot of a settlement I negotiated for a lakeshore resident’s trust owned policy a few years ago. In the actual case, the client’s policy was sold for seven hundred thousand dollars! Hey, what’s a single little zero anyway?
This piece is on how agents and advisors seek out information and expertise regarding the life settlement industry. The industry was turned on its head over the past couple of years and that is not necessarily a bad thing. All the rules have changed and it’s still a quirky market but its built around an amazingly valuable and important concept.
My experience regarding how professionals are seeking out expertise is very similar to what you will read in the article. Lately I get unsolicited calls from, say, a corporation’s accountant or a business owner’s estate planning attorney inquiring about the options regarding settling a client’s policy. Generally the original purpose for the policy is non existent at present, the client can no longer afford it or the policy is so hopelessly underperforming that it is destined for failure at any reasonable cost and they are looking for a reasonable salvage value over cash surrender value. Even when it turns out that a policy is not attractive to the market and should be surrendered or exchanged into a new policy and the advisor can not go back to the client with great news, he has certainly fulfilled his professional duty. Besides, whether or not there is a market for a given policy, it is information which helps drive informed decisions.