CPAs

The growing life settlement market is a new frontier for CPAs who serve affluent seniors and corporate clients. In addition, many CPAs serve as advisors to charitable organizations that accept donated life insurance policies. Therefore, it is important that CPAs have an understanding of the many benefits of a life settlement.

If you are currently working with senior clients who have unneeded or underperforming life insurance policies, it is very likely that you can save them substantial sums by using the proceeds from a life settlement to purchase a new policy with better coverage-and in some cases cancel the annual premiums entirely.

CPAs also need to understand the value that a life settlement can provide in terms of assisting their senior clients with estate planning decisions that enhance the senior's financial portfolio. In addition to providing an exit strategy from a more expensive policy, life settlements can also provide options to other financial planning objectives such as providing liquidity for other investments, freeing up cash, facilitating charitable giving, financing long term care, and enabling cash gifts to family members.

CPAs will also want to consider a life settlement in certain business applications. In the case of a buyer considering the purchase of another company, part of the due diligence should involve an evaluation of "key man" life insurance policies on departing executives. It is often the case that such policies are permitted to lapse without even being aware of their life settlement qualifications. Furthermore, life settlements can be used to enhance severance or retiree packages.