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Financial professionals,
particularly those practicing in the areas of
estate planning, guardianship and elder law, as
well as attorneys, accountants,
CPA’s, trustees and any other fiduciary dealing
with in-force life insurance policies or life
insurance trusts should familiarize themselves
with the secondary market for life insurance policies.
Life
insurance policies may be sold in the secondary
market in a transaction known as a “life or senior
settlement”. These
settlements result in the sale of all right, title
and interest in an eligible life insurance policy
in exchange for an immediate cash payment, which
is more than the cash surrender value of the policy
but less than the policy death benefit.
Today,
there is little room for debate that life settlements
provide a viable alternative to the lapse or surrender
of unaffordable, underperforming or unneeded life
insurance policies.
The benefits of the secondary market have
been examined in recent articles published by
the Wharton
Financial Institutions
Center
and more recently the Bernstein Research Call.
Click here to read the Bernstein article
Click here to read the Wharton article
Click here to read an article concerning viaticals & new issues for estate planners
Click here to read the 2006 Industry Outlook
A
life settlement can provide a client with a valuable
source of funding for long term care insurance,
charitable giving, cost effective replacement
life insurance coverage or alternative income
producing investments.
Those
professionals who are not informing their clients
of the added value a life settlement can provide
may be creating potential liability for themselves
if they allow a policy that is otherwise eligible
for settlement to be surrendered or lapsed.
To
learn more or to submit questions Click here
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