Help Set Life Settlement Strategies

Accountants should make sure they are well versed with Life Settlements as the growing secondary market for life insurance is allowing for new opportunities for seniors with a high net worth as well as corporations and charitable organizations.

Most utilize a Life Settlement to finance a new life insurance policy with a lower premium. Because of newer mortality tables with lower cost of insurance, reinvesting the settlement proceeds into a new policy can result in reduced or sometimes completely eliminated future premiums for the same amount of coverage. Some have also utilized the proceeds for Long Term Care, a deferred annuity or other personal needs. If your clients acquired policies 2 years ago or more, you may be able to help them. Of course, this is dependent on their health and the rates for the new coverage. A Life Settlement can enable an additional exit strategy to a life insurance policy rather than surrendering the policy for its cash surrender value or simply lapsing the policy.

It is important for CPA’s to understand the value Life Settlements can provide with regard to their clients financial portfolio. In the past, life insurance was traditionally viewed as a liability because one had to make a premium payment. However, with the emergence of the Life Settlement marketplace, life insurance policies can now be viewed as assets due to their potential value.