Life Settlement’s Benefits Often Are Misunderstood - Insurance News | InsuranceNewsNet

InsuranceNewsNet — Your Industry. One Source.™

Sign in
  • Subscribe
  • About
  • Advertise
  • Contact
Home Now reading INN Exclusives
Topics
    • Advisor News
    • Annuity Index
    • Annuity News
    • Companies
    • Earnings
    • Fiduciary
    • From the Field: Expert Insights
    • Health/Employee Benefits
    • Insurance & Financial Fraud
    • INN Magazine
    • Insiders Only
    • Life Insurance News
    • Newswires
    • Property and Casualty
    • Regulation News
    • Sponsored Articles
    • Washington Wire
    • Videos
    • ———
    • About
    • Advertise
    • Contact
    • Editorial Staff
    • Newsletters
  • Exclusives
  • NewsWires
  • Magazine
  • Newsletters
Sign in or register to be an INNsider.
  • AdvisorNews
  • Annuity News
  • Companies
  • Earnings
  • Fiduciary
  • Health/Employee Benefits
  • Insurance & Financial Fraud
  • INN Exclusives
  • INN Magazine
  • Insurtech
  • Life Insurance News
  • Newswires
  • Property and Casualty
  • Regulation News
  • Sponsored Articles
  • Video
  • Washington Wire
  • Life Insurance
  • Annuities
  • Advisor
  • Health/Benefits
  • Property & Casualty
  • Insurtech
  • About
  • Advertise
  • Contact
  • Editorial Staff

Get Social

  • Facebook
  • X
  • LinkedIn
INN Exclusives
INN Exclusives RSS Get our newsletter
Order Prints
March 11, 2015 INN Exclusives
Share
Share
Tweet
Email

Life Settlement’s Benefits Often Are Misunderstood

InsuranceNewsNet

By Stephen Terrell

Every financial advisor knows that this business is fiercely competitive. The key to success is understanding tools that provide clients with flexible options.  Life settlements are just that kind of tool. However, despite their growth, too often life settlement’s benefits aren’t understood and go unused.  

The life settlement industry isn’t new; it has been around for more than 20 years. Yet while the growth of life settlements reflects how advisors are embracing their advantages, too many advisors remain uninformed, or even worse, misinformed about them. 

The result is lost opportunity for both advisors and their clients. What should be a powerful and timely weapon in every financial advisor’s investing toolbox goes unused as incorrect perceptions work against advisors and the clients they serve. 

However, this disconnect with financial advisors is an education gap that is easily remedied.

Life Settlements – Fact and Fiction

Life settlements are investment options growing in popularity because they are flexible and offer unique benefits. No special knowledge set is required to obtain a life settlement and transactions are regulated by state statutes that protect client privacy.

Today’s life settlements are opportunities to serve clients.  These are not the stranger-oriented life insurance practices of years ago. The industry is licensed and scrutinized, the buyers are trustworthy, and transactions are monitored by state insurance departments.

Fiduciary Best Practices

Life settlements often reveal that the policies can have significant asset value beyond the value of the contract.  While this is news, best fiduciary practices dictate that, like every investment being considered by a financial advisor, the life settlement option must pass the does it make sense for the client test.

If the client is pleased with the policy, can afford it, and it aligns with the overall investment strategy, it should be left in place. Additionally, in every case, estate tax exemptions and consideration also must be factored in as part of the long-term plan.

When Life Settlements Make Sense

There are three primary scenarios in which life settlements make sense:

First, old, outdated policies – and many new ones – may be underperformers. Like every underperforming investment, these should be analyzed closely.

Second, if the policy is expensive and the client often can’t afford it. Allowing it to lapse gives the client nothing, whereas selling it may yield even more than the policy value.

Third, if the policy no longer makes sense.  Life insurance purchased for a young and growing family may have been outgrown and may no longer fit the policyholder’s investment strategy.

Money-in-Motion Liquidity Events

This strategy creates capital and capacity for new investments.  Additionally, this is a way to supplement or redefine retirement lifestyle and to fund long-term care, when necessary.

In this context, a passive, forgotten and outdated investment is used to transform or ignite investment strategy and offers a client a new beginning or timely solution.

What Advisors Should Do

With the facts in hand, look at your client’s portfolio with a new understanding of the safety and benefits of life settlements that may make sense for them. Advisors will create new opportunities to serve their clients and grow their business.

Stephen E. Terrell is senior vice president of market development and branding of The Lifeline Program, a life settlement provider based in Atlanta, Ga.  He may be contacted at [email protected].

user

Older

Big Data Offers Opportunities, But Has Limitations

Newer

Proposed Benefit Changes Could Hurt Veterans

Advisor News

  • Martin Seay elected 2026 CFP Board Chair-Elect
  • Implementing best practices during the Great Wealth Transfer
  • Harness AI for marketing success
  • Tariff uncertainty and volatility mark administration’s first six months
  • How SECURE changed the rules for inherited IRAs
More Advisor News

Annuity News

  • Peak 65 consumers hit the pause button on retirement
  • The Standard and Legacy Marketing Group Unveil EclipseMark FIA
  • Finding the ideal customer for fixed and indexed annuities
  • Integrity hires Said Taiym from Lockton as company’s first COO
  • Nassau Financial Group Launches Innovative, Growth-Focused FIA: Nassau Athos Annuity
More Annuity News

Health/Employee Benefits News

  • ACA marketplace plans seeking double-digit premium increases for 2026
  • 2.8M Americans potentially enrolled in more than one Medicaid/ACA plan, CMS says
  • Report: Feds failing to fully address fraud in govt health insurance program
  • Beware of the Medicare Advantage Trap
  • Thousands more could get Medicaid coverage under SC request for limited expansion
More Health/Employee Benefits News

Life Insurance News

  • Improving financial wellness: The key to elevating your overall well-being
  • Harness AI for marketing success
  • ‘We lost a great one’: longtime life insurance educator Joe Belth dies at 95
  • Symetra Benefits Division Partners with Paralympian and Author Chris Waddell
  • Improving financial wellness: The key to elevating your overall well-being
Sponsor
More Life Insurance News

- Presented By -

Top Read Stories

  • Medicaid work requirement coming to NC; more than 48,000 could be affected in Triad region
  • SEC: Cutter Financial press release on verdict ‘inaccurate and misleading’
  • Charitable giving: Cash ‘bad;’ everything else ‘good’
  • NY faces billions in lost federal funding for Medicaid, food assistance
  • Top Stories Digest
More Top Read Stories >

NEWS INSIDE

  • Companies
  • Earnings
  • Economic News
  • INN Magazine
  • Insurtech News
  • Newswires Feed
  • Regulation News
  • Washington Wire
  • Videos

FEATURED OFFERS

2025 LIMRA Annual Conference
Gather with top executives, where bold strategies ignite inspiration.

Increase sales up to 30% with INN Academy
Master sales strategies from industry legends. Flexible learning, immediate results. Don't miss out—save up to 50%!

Press Releases

  • Xcela Secures Strategic Investment from Shinaji to Accelerate AI Innovation in Life Insurance
  • 3 Mark Financial Celebrates 40 Years of Excellence in Insurance Distribution
  • Senior Market Sales® (SMS) Acquires MIC Insurance Services
  • Giardini Medicare, a Social Media Education Powerhouse, Joins Senior Market Sales®
  • Royal Neighbors of America® Launches New Single Premium Whole Life Product
More Press Releases > Add Your Press Release >

How to Write For InsuranceNewsNet

Find out how you can submit content for publishing on our website.
View Guidelines

Topics

  • Advisor News
  • Annuity Index
  • Annuity News
  • Companies
  • Earnings
  • Fiduciary
  • From the Field: Expert Insights
  • Health/Employee Benefits
  • Insurance & Financial Fraud
  • INN Magazine
  • Insiders Only
  • Life Insurance News
  • Newswires
  • Property and Casualty
  • Regulation News
  • Sponsored Articles
  • Washington Wire
  • Videos
  • ———
  • About
  • Advertise
  • Contact
  • Editorial Staff
  • Newsletters

Top Sections

  • AdvisorNews
  • Annuity News
  • Health/Employee Benefits News
  • InsuranceNewsNet Magazine
  • Life Insurance News
  • Property and Casualty News
  • Washington Wire

Our Company

  • About
  • Advertise
  • Contact
  • Meet our Editorial Staff
  • Magazine Subscription
  • Write for INN

Sign up for our FREE e-Newsletter!

Get breaking news, exclusive stories, and money- making insights straight into your inbox.

select Newsletter Options
Facebook Linkedin Twitter
© 2025 InsuranceNewsNet.com, Inc. All rights reserved.
  • Terms & Conditions
  • Privacy Policy
  • InsuranceNewsNet Magazine

Sign in with your Insider Pro Account

Not registered? Become an Insider Pro.
Insurance News | InsuranceNewsNet