How to generate resources in retirement, are life settlements the "Van Gogh" in your attic? - YouTube

We've all heard the stories about someone who finds an old knick knack,

vase or painting in their attic that ends up being worth an unexpectedly

large amount of money. Well, Mike Coben who heads up business development at

Lighthouse Life is here to explain how people can find the hidden value within

their life insurance policy that may be just sitting in their drawer. Mike how

does this work? Well Melanie, typically when people buy life insurance they buy

it and they put their policy in a drawer and they really never look at it until

many years down the line. And they could be sitting on a significant amount of

lifetime value that they may not even realized that they have access to. It's

very similar to if you bought a antique and you put it in your attic and the

antique was a painting and you think 'well you know I don't I don't know if I ever ever use

this antique I'm not sure where it fits in the kitchen' but lo and behold the day

that you sell the house you find the antique again, the antique painting

again, and you bring it out and you get it appraised and it turns out to be a

valuable Van Gogh and you sell it for a tremendous amount of money that you

could utilize for moving, retirement expenses, etc.. Well life insurance could

be similar in terms of having a value that you don't really know until the

policy's appraised. And life insurance can be appraised for a market

value that could exceed a significant amount above what the insurance company

typically could provide in its surrender value or you know possibly just lapsing

for very little value at all. And that that process of appraising a policy and

selling it to institutional purchasers is called a life settlement. And it's

really for seniors that have changing needs and they bought the insurance for

good means at the inception, whether it was for spousal protection for business

insurance and then down the road they decide they don't really need the policy

or want it or can't afford it anymore and they have an exit strategy that

could provide significant revenue for them that will take care of current

needs such as health care or retirement income needs. Okay, so you said this is

good for seniors so it sounds like everyone who has a life insurance policy

that isn't the best fit for, so who is the best fit for this? So typically it's insured's or policy

owners that are 70 and above, that as I said earlier, have deemed that their

policies are too expensive to continue or their needs have changed and they

really don't need the insurance anymore. Okay. And realistically how much money

can a person get if they sell their policy in a life settlement? That's a

great question and it's very difficult to answer because it depends on the

individual circumstances of the policy and the individual that's the insured.

But the industry has seen that the value generated from a sell of a policy, if it does

have market value, is significantly more than what the insurance company provided.

Significant in the tune of four times greater than what potentially the value

is in the policy itself from the values from the insurance company. Okay, so if

people can get that much money, why aren't more people doing this? Lack of

awareness. Companies like Lighthouse Life, which I represent, are really geared

for educating the general public in terms of greater knowledge of the

marketplace, or the existence of the marketplace, and also spending a lot of

time with advisors. Anyone that's advising a client on their financial

affairs, inclusive of their life insurance, we are as an industry and as a

company really spending a lot of time educating advisors in providing this

valuable option to clients that may not even really understand or

realize that they have some significant value that is sitting in their attic

that they're just letting their you know letting the value be unrealized.

So what do you recommend the policyholders do what should advisors be

doing for them? So, I would suggest that if a senior becomes aware of the fact

that they don't really need their insurance anymore, they can't afford

their insurance that they should approach their financial advisor to

investigate this exit strategy as a possible exit strategy. Also, as a

financial advisor, if a client approaches them and says you know, the policy I

purchased in the past I don't really necessarily need, or want, or can't afford,

or I have a need fund a shortfall in retirement now as you know, as they

may be discussing currently with their advisor.

Or needs for funds to take care of current health care or long-term care

costs, that's when an advisor should say based on your current circumstances I

think we should consider valuing your policy and seeing if it has a market value

that we could use for your needs today. You know as I said earlier, it's like

digging that painting out of the attic and realizing the value and utilizing

the value for your current needs. Just getting it out of the drawer instead of the attic. Alright, thanks Mike! I appreciate you

taking the time to explain this to me. Thank you very much. And if you would like more information on

how you can find the Van Gogh in your attic visit LighthouseLife.com.