One of the major reasons for this lack of knowledge involves a profit motive for the insurance companies, as they would prefer that a person, regardless of their reason for not continuing their coverage, either surrender their policy back to the insurer, or merely discontinue paying their billed premium, as either option translates into the insurance company keeping all of the past years' paid premium while never having to pay out a death claim.
If a decision is made to no longer maintain their coverage, most clients either surrender the policy back to the life insurance company for its cash surrender value, or they merely stop paying the billed premium and, by virtue of default, they use up the accumulated cash surrender value until the coverage expires. The problem is the majority of clients, and many of their advisors, are not familiar with the concept of a life settlement. A study conducted by the Insurance Studies Institute found that 90 percent of seniors who lapsed a life insurance policy would have considered a life settlement had they been aware of the possibility. In that same study 79 percent of clients felt advisors should inform them about a life settlement strategy.
0 kommentar(er)
