Agents & Brokers
Life insurance consultants and agents are reaping the rewards of life settlement transactions they introduce to their clients. The secondary market for life insurance is not only keeping existing policies in force, but life settlements are producing cash for the purchase of new life insurance policies.
- Benefits to the life insurance consultant and agent include:
- Continue earning renewal commissions on the existing policies.
- Earning new commissions on new life insurance policies sold.
- Earning conversion commissions on converted term policies.
- Earning fees for investing the client's funds in annuities or other investments.
- Acting in the best interest of your client by advising them about the possibility of selling a life insurance policy for more than cash surrender value or selling a term policy instead of letting it lapse.
Although some life insurers complain that the sale of policies into the secondary market is unfair and hurts profits, the very existence of the secondary market has increased the value of life insurance, which in turn should increase demand for new policies. The entry of insurance carriers into the life settlement market is a strong indication that even insurers acknowledge the opportunity and value of this market.
Questions to ask your clients
The following are common questions to ask your clients prior to determining whether a life settlement may be a viable option:
- When was the last time you had your life insurance policy reviewed?
- Does the need for the policy still exist?
- Have you had any significant life changing events?
- Is your policy in danger of lapsing or being surrendered?
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