In January, I was calling leads that were interested in learning more about life insurance settlements. Many seniors don’t know that they can sell their existing life insurance policy(ies) for cash now and no longer be required to make future premium payments on the policy(ies).
A 77-year old male from Arizona, with $3 million in life insurance policies was my next call. So I called, and no one answered but I left a message for him, and repeated many times over. He was a great lead. Any man over 75 years old is a good candidate (women over 77). Additionally, the premium payments may be getting burdensome for him, compared to his overall budget since he has such a large policy. Or, like so many others 15-20 years ago, he may have purchased excessive amounts of life insurance to cover future estate taxes. Those tax rates have now decreased and the benefit of the policy is no longer critical to his financial well-being, or that of his estate.
At the end of March, I went back to a few old leads that I wasn’t initially able to reach. My 77-year old gentleman in Arizona was on that list. So I called him, thinking that I’d hear that voicemail again. To my utter shock, he picked up the telephone on the first ring. What a surprise!
We had a great conversation. We talked about life settlements, how they work, their purpose and the benefits, how they aren’t for everyone, but can be very beneficial to many. Then, he told me that he let his $3 million in life insurance policies lapse in January because he didn’t want to pay the $27,000 in annual premiums that were due.
I was (almost) speechless. I couldn’t possibly tell him that he may have left up to $1 million on the table. I suggested that he call his agent to determine if there was any way he could reinstate his policy and to call me back. Unfortunately, I never heard from him again. I’m sick and saddened that he paid for his life insurance policy for so long, and never benefited from it (other than the comfort of knowing that if he died prematurely, his family would be covered).
Never, ever let this happen to your friends, family, colleagues, clients and others in your community. Please let them know that if they are over 75, they may be eligible to get more than cash surrender value by selling their life insurance policy, especially if it’s done through a competitive bidding process. We, at BrightPath Financial, have relationships with many private equity companies that want to purchase life insurance policies. You may be surprised by some of the companies actively purchasing policies: Goldman Sachs, Berkshire Hathaway, Credit Suisse, Bank of America, Wells Fargo, among others.
And one final note, even term life insurance policies can be sold. So, if you know a business owner with key-man life insurance, or someone else with a term policy, do NOT allow them to let the policy lapse without considering a life settlement.