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In its simplest terms, the secondary market for life insurance means that policyowners no longer have to accept surrender value. By selling their underperforming life insurance in a competitive marketplace, they can realize up to four times cash surrender value, or more.
The implications are profound. The market has created a new independent source of nonforfeiture value. Like other assets, life insurance can now be valued in an open marketplace. By simply submitting basic information about the policy and the insured’s health, the advisor can learn what the policyowner would likely receive, either as a cash payment or in the form of a new paid-up policy. For financial professionals, this valuation provides a powerful new tool for evaluating and managing a client’s financial health.
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