Top Ten Myths? - #5 “Life insurance should never be sold”

The reality is if you have ever had a policy surrender or lapse you are already very active in the liquidation of life insurance policies. You are simply failing to obtain maximum benefit, or, if you're an advisor, you are failing to get maximum benefit your clients.

In a surrender scenario, the policy is being sold back to the insurance company for a predetermined price. In a lapse scenario the policy is also being sold back to the carrier but at a zero price.

A "Life Settlement" simply allows for the fair market value of the policy to be recovered in the "secondary market" that has devoped today.

There really never was a time when policies were purchased by some crooked character that ensured the policy “matured” in a timely manner. Today’s Life Settlement market is comprised of very sophisticated capital from primarily institutional sources. Policies purchased as a "Life Settlement" are a long-term investment for the respective funder.

These policies must remain in force or the funder will never realize a return, so these policies will never lapse. Incidentally, trailer commissions and renewals continue.

Even term policies can be sold if the policy is convertible to permanent coverage or if the term of the contract exceeds the computed life expectancy. Term policies are a great way to generate new capital for you, or as an advisor, for your client since they have no accumulated cash value.

Even term policies can be sold if the policy is convertible to permanent coverage or if the term of the contract exceeds the computed life expectancy. Term policies are a great way to generate new capital for you or as an advisor for your client since they have no accumulated cash value.