Life Settlements and Estate Planners

Life settlements impact estate planning strategies more than any other field due to the crucial role that life insurance plays in the estate planning process.

Critical decisions in the estate planning process.

Estate planners now use the secondary market for life insurance as an additional tool to serve their high net worth senior clients. Life settlements are becoming an integral part of estate planning strategies to ensure assets are transferred in accordance with the wishes of their clients. The estate planning strategies are often shaped by a number of important considerations such as:

  • Has the client's circumstances changed to the extent that a life insurance policy is no longer necessary?
  • Has the client's life insurance needs changed to the extent that a different amount of life insurance is more appropriate?
  • How does the estate ensure each beneficiary's specific needs are met?
  • What are the benficiary's tax consequences of the client's estate?
  • How to ensure that a family business stays in the family
  • What are the client's wishes for charitable giving?
  • Would proceeds from a life settlement more effectively assist in the distribution of an estate?

How do estate planners benefit from advising clients about life settlements?

Life settlements have become an established tool in the estate planning process. Increased awareness of life settlement application as an estate planning strategy will better serve clients and fulfill your professional responsibility to explore all options for your clients.

  • Fulfill fiduciary responsibility to evaluate all strategies and implement most appropriate course of action for clients.
  • Earn referrals by demonstrating expertise through creative estate planning strategies.

How should estate planners proceed with life settlements?

Estate planners should comprehensively examine their clients' estate for specific needs which may include life settlements. These can be used to fulfill a broad range of estate planning objectives for clients and creatively serve the interests of the estate. Estate planners should:

  • Evaluate the client's overall financial needs, and determine if their current insurance coverage is appropriate for their financial needs. Clients may have insufficient or excess coverage.
  • Determine if selling a life insurance policy to reduce coverage or using the proceeds of life settlement to buy new, paid up policies for increased coverage is prudent.
  • Utilize our life settlement appraisal tool to determine the likelihood your client is an ideal candidate for a successful life settlement transaction.
  • Perform due diligence by engaging the marketplace for a reputable life settlement broker or the Amrita Financial system. Amrita only allows accredited financial institutions to bid on life insurance policies in its system.
  • Pursue the highest market value for the seller by reviewing multiple offers and selecting the one that will return the best life settlement for the client.