Estate Planners / Attorneys

The secondary market for life insurance is providing estate planners and attorneys with an additional tool to serve their high net worth clients. As estate planners develop strategies to ensure that assets are transferred in accordance with their clients' wishes, they need to ask themselves if the proceeds from a life settlement will help provide for the more effective distribution of the estate.

As a result of the life settlement market, estate planners and attorneys will want to consider the following:

When the market value of client assets are inventoried, the advisor and client will need to know the fair market value not only of stocks, bonds and real estate, but of life insurance policies as well.
When advising clients on how to exit from any unwanted life policy, advisors need to consider whether a life settlement is the most suitable choice.
In estimating death taxes, advisors need to consider how the IRS will value any life insurance policies on the lives of others. Will it be at fair market value?

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?