As a part of your fiduciary responsibility, you should be familiar with the option of a life settlement for any client with a life insurance policy, be it an individual, a trust or a business. You should be aware that there exists a secondary market for life insurance policies, an institutional market which buys life insurance policies purely for financial gain.
Familiarize Yourself With The Option of a Life Settlement
What is a life settlement? A simple definition is “the sale of a life insurance policy on the life of a senior into a secondary market for more than the cash surrender value.”
As a part of your fiduciary responsibility, you should be familiar with the option of a life settlement for any client with a life insurance policy, be it an individual, a trust or a business. In fact, several states have statutes on the books that make it mandatory for an insurance company to notify an owner about this option if he is surrendering or lapsing a policy. You should be aware that there exists a secondary market for life insurance policies; an institutional market which buys policies purely for financial gain – that is, the death benefit. There are enough of these institutional buyers such that a rather organized market has evolved over the past twenty years.
While policy values in today’s market are somewhat depressed due to global financial conditions, for any market to work, sellers must benefit also. Here is how it typically works. Life settlement brokers, who represent the seller, solicit bids from possible buyers (institutional funds) with the intent of creating an informal auction, in which buyers are bidding against one another, driving up the price. It is important to understand that a life settlement broker can tap into the entire market at one time. Naturally, there can be a huge difference in the selling price between simply contacting one life settlement buyer as compared to getting multiple bids through a broker. Beware, therefore, of the distinction between buyers and brokers. Bottom line, a life settlement broker works for your client to maximize the sale price of a policy by leveraging potential buyers against one another. The broker’s commission, being a percentage of the gross sales price, will increase as well, so the broker has an incentive to perform well for his client.
Integrity Life Solutions, LLC offers a free CPE course with No Strings Attached. Our free CPE course is written per NASBA guidelines which approves us to offer a 100 minute free CPE class. This course is designed to save you time and money while you learn and earn free credits.
This 2 credit free CPE and CFP class introduces an overview to the Life Settlement industry. This free CPE course will explain why it is your fiduciary duty as a CPA and CFP to understand and recognize a viable life settlement and to be able to explain it to your clients.
http://www.freecpe.org/
Integrity Life Settlements is a viatical settlement and life settlement broker, located in the New York area in Maplewood NJ. They negotiate the transaction between the seller and the Buyer. Their expertise is in obtaining the highest possible value for your policy from only reputable financial institutions. Integrity Life Settlements is affiliated with other professionals including attorneys, accountants and actuaries who can provide you with independent financial advice. If you prefer, Integrity Life Settlements will work with any of your trusted financial and legal advisors. In either case, a due-diligence will be performed prior to any transaction.
http://www.freecpe.org/
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