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 policy in a competitive marketplace, they on average realize four times the cash surrender value, or more.
The implications are profound. 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 to retain a portion of death benefit with no future premium payments. For financial professionals, this valuation provides a powerful new tool for evaluating and managing a client’s financial health.