As you know, life settlements offer new options to clients, and we were recently approached by a family looking for something that could shift their financial outlook. The husband, 74, had been diagnosed with dementia and several other minor health issues. His mental acuity had begun a more rapid decline.
The wife, seeing this and wanting to plan for the additional care they would need moving forward, decided the time was right to supplement their retirement savings and initiated the evaluation of their $500,000 universal life policy. When the couple contacted Settlement Benefits Association, we saw the potential in the case immediately. With premiums that accounted for less then 3% of the face value annually, we built a marketable file.
As they normally do, the third party life expectancies disagreed over the insured’s prognosis. With our experience, we knew how to present the case and overcome this hurdle. Soon after shopping the file, we received our first bid: $60,000.
The life settlement process is not always smooth. Although the client wanted to jump on the offer in an effort to avoid an upcoming premium payment of over $5,000, we knew that the intrinsic value of the case was much higher, and it would take intense negotiations to bring that out. So, we worked tirelessly to uncover interest from several additional buyers and solicit their opening bids. This slowly turned into the competitive bidding situation we aim to create. As the bids continued to improve, $80,000, $105,000, $110,000 the clients really understood the value of working with us. And by the time we finished, the price was driven up to $120,000, exactly double where we started.
Of course, the clients happily went thru the closing process and received their money. The wife got the additional help she needed, bought a small annuity to provide a future income stream, and happily discontinued paying the premiums that had become burdensome.
We all know people like this couple, who have been dealt changes to their circumstances, be they health changes, financial changes, or otherwise. Next time you see a client with a life insurance policy they don’t want or need; please call us at 888-255-0444 and let us find them a similar option.