Life Settlements for Financial Advisors

Author: Grant Shellhammer
Source: download

A Life Settlements is the of a life insurance policy by a senior for an amount greater than the current Cash Surrender Value of the policy.
The proceeds of the sale can be used in any way and are often utilized to fund other financial products including additional life insurance, long-term care, annuities, and investments for future financial gains.
Policy owners and their financial advisors have fund new value in life insurance by employing life settlements as a dynamic financial planning tool. In a majority of the cases, many of these life insurance policies are under performing, unwanted, or no longer needed.
Financial advisors now have the ability to offer life insurance settlements to their senior clients. This is a new tool the can create a creative and valuable option to your clients.
Some benefits to the advisors are:
Creating new capital for clients. The new capital generated by a life settlement will allow the advisor to present additional products that can greatly benefit the client.
Reducing the rate of policies lapsing. Policies without cash value are often lapsed, even after years of premium contribution. A life settlement now provides a payout for a policy your client is going to lapse.
Keeping renewal and residual income. After the policyholder is issued a settlement, the policy is still in force and the life settlement company is still paying premiums. This will keep any residuals intact.
Life settlements also generate the ability to build client loyalty by converting their life insurance policy into cash that exceeds cash surrender value. Most senior policyholders are not aware that a life settlement is available to them. The financial advisor can now gain tremendous loyalty by educating and assisting their client with a product that will generate “new found money”.
Financial advisors and professionals who offer life settlements to their clients are able to receive life settlement commissions. The advisors can also earn additional commissions on replacement insurance such as Annuities, Long Term Care, Life Insurance, and other financial planning products.
RTG Consultants are Life Settlement Specialists and provide life settlement marketing and training kits to agents and financial advisors nationwide. Life Settlements can be offered through RTG’s life settlement broker affliate.

Structured Life Settlements 101

Author: Natalie Aranda
Source: articledashboard.com

The term structured life settlement is usually applied to a personal injury settlement of some type whereby an agreement has been reached to pay the settlement over an extended period of time rather than in a lump sum payment. The idea of life time settlements has grown more popular over the last few decades as research has shown that a very high percentage of people who receive large lump sum windfalls either as injury settlements or lottery winnings tend to have very little or any cash left after five years.

Another advantage of structured life settlements is that they usually are given tax breaks, and in some cases are even exempt from taxes altogether. Although they are called life settlements, some of them can be structured to extend for a certain time period regardless of the life span of the person receiving the settlement. The remaining payments would be made to a persons beneficiaries or his estate in case of his death. It is always advisable to have an attorney with experience in life settlements review the details to insure that the total payments are not considerable under the original reward amount. An attorney can also advise on the tax liabilities of any decision.

There are other forms of life settlements beside the structured life settlement for personal injury judgments. Large lottery winnings are an example. Most large lottery winnings may be taken in a lump sum or spread over a long period. Although most people opt for the lump sum payment, they often do not take into consideration the immense tax hit that the winnings will have to take. Often, the extended payment option is the wiser course.

Another form of life settlement has arisen around the life insurance industry. It originally began with the purchase of life insurance policies of seriously ill people. This came about when people who were diagnosed with fatal illness realized that they had no money to pay for treatments or to ease their remaining years. They did have large amounts of life insurance, but this money would not be theirs until they died, and did them no good. Investors would make life insurance settlements by paying cash to become the beneficiaries of the policy. Then the investor would wait until death took place and the cash the policy.

This form of life insurance settlement has also become popular for investors who are viewing people over 65 years old who do not care about heirs, and have inadequate retirement income. Investors make a settlement paying a lump sum value to become the beneficiary of the policy, and then just wait again for death to occur.

One sign of the popularity of structured life settlements is an increase in investing companies willing to buy out the settlements for lump sums of cash. A large sum of cash has always been a great temptation, and often people who wisely defer to the structured settlement find themselves regretting the decision and wishing another chance. The ultimate value of the structured life settlement approach is shown by the fact that serious investment firms are willing to purchase them for cash.