Audits as a Sales Vehicle
Audits (see “Audits” section) are an ideal sales vehicle for a producer in that they provide the following advantages:

• The target market is your existing client base – you already know them.
• There is no question of the value that you are adding for the client. The results are measured in dollars of reduced premiums.
• You are fulfilling your responsibility as their agent by evaluating whether they have the current best available product.
• If their current policy performance is not meeting original assumptions, you pre-empt a looming embarrassment by providing a solution.
• There is no “sale” to make! They have already made the decision for life insurance. You approach your client with a question, “Would you like lower life insurance premiums?” The only “issue” to deal with is, “This is too good to be true.”
• This kind of value added cements producer/client relations and results in referrals. Your client can’t wait to tell his buddies what just happened.

Expanding Your Sales Universe
What is the next step after you have exhausted you file of current clients? There is a whole community of financial advisors, attorneys, trust officers, etc. who deal with client life insurance. Although they have a fiduciary duty to manage these assets, they seldom are up to speed on trends in the life insurance industry. Your best source of new business is probably to leverage your relationships - and develop new relationships - with this advisor community. Here is how we would see the Opportunity Concepts / Agent / Advisor relationship working:

OC Provides OC Receives Education Audit Services Policies as Needed Life Settlement Options Brokerage Fees Agent Provides (via OC) Agent Receives Education Audit Service Policies Compensation through fees and commissions on policies and life settlements Advisor Provides Advisor Receives Fulfillment of Fiduciary Responsibility Value to the Client Growth of Client Assets Compensation through normal channels per their company policies - fees, commission, etc. Strengthened Advisor/Client Relationship

The agent can either conduct all advisor/client interfaces or invite OC in to present to the advisor and client (recommended for larger opportunities.) Once the agent introduces OC to the advisor, he will receive compensation for any business originating from that advisor.

Steps in Developing the Advisor Relationship
Step 1. Introduce the advisor to the following core concepts (OC has reference material to help)

• The majority of in-force insurance policies are not performing as well as a new policy could (client paying too much – in some cases double)
• Because of escalating premiums, many older clients let their policies lapse or take the cash value.
• In many cases the policy can be sold on the secondary market, often for several times the cash value.
• The proceeds can often be rolled into a new policy to make premiums affordable and the client can retain (guaranteed) coverage.

Step 2. Offer to provide more in-depth education on the current status of the life insurance market. Bring OC in to do the training.

Step 3. Working with the advisor, define a test case (this may be the advisor’s personal insurance policy.) See “Audit” section for guidelines on the most attractive cases.

Step 4. Develop a plan for reviewing the advisor’s entire portfolio of client policies.

Life Settlements as a Sales Vehicle
A review of your clients’ life insurance portfolios can yield a matrix of opportunities for the clients and you, the agent. If a client is older (70+) the secondary market for his life insurance may be able to generate cash to fund any number of alternative options.

Here are some things to think about.

1035 Alternative
A 1035 exchange allows a client to roll the cash value of a policy which is being terminated over into a new policy, with no taxable gain. Instead of taking cash value, an older client MAY be able to sell his policy on the secondary market – for considerably more money, pay taxes  on the gain and still net more than the cash value of the policy.

Policy Rescue Strategy
How can an agent rescue a client with a UL policy which is “falling apart” due to changing assumptions, now requiring increasing premiums. If the client qualifies, you may be able to sell the policy on the secondary market and use the proceeds to fund a new policy with guarantees and possibly lower premiums.

Lapse Max
A client may decide to let a policy with no cash value lapse for any number of reasons. A  lapsed policy has zero value for the client. Value may be maximized for the client through a sale in the secondary market. If the client is 70 years old he can’t lose by trying a sale.

Surrender Challenge
If your client is thinking of surrendering his life insurance policy for its cash value, challenge him to let you find a better offer by selling his policy in the secondary market. In a recent case the client’s return was raised from $13,000 to $493,000 – a 3700% improvement.

Asset Equity Analyses
Has your older client’s life insurance needs changed? No, he wants and needs his policy! What if you could get him a better policy (better guarantees, etc.) with the same face value, for a lower premium? By shopping his policy on the secondary market we can determine its asset equity. This may be enough to acquire a better policy for the same or lower premiums.

Needs Alignment Process
Has your client’s life insurance needs changed? Yes, the need for cash for a long-term care policy may have replaced the need for death benefit protection. Let us shop the policy in the secondary market and see if you can align your client’s needs with their assets.

Answers to Common Questions
Q. I have only been dealing with life insurance for 5 years. I don’t have many (or any) clients that fit this profile. Can I still engage in this market?
A. The best way to engage in this market is through professional advisors - who you educate:

• Attorneys
• Financial planners
• Trust Officers
• Accountants
• Brokers

By helping these professionals bring value to their older, high net worth clients, and splitting fees with them, if appropriate, you are creating a win-win-win scenario. Remember, the first person to bring this concept to a professional advisor is probably the one he will bring his business to.

Q. I know some professional advisors, but I hesitate to approach them about Life Settlements because of my lack of in-depth knowledge in this area. Can you help?
A. Absolutely! We welcome the opportunity to join you in a meeting with your contact in the professional advisor community. We can explain the history, regulations, application and potential client benefits. We will become fully engaged in helping you bring this solution to the market.

Hurdles
Negative attitudes have been generated by some past abuses and by carriers, who have a financial interest in discouraging Life Settlements. This can present hurdles in these areas:

Company Policies (see Ethics)

Misunderstanding (see The Concept)

Lack of clients who fit the profile (see Sales Strategies)

We can help you overcome these hurdles and open the door to opportunity! Contact us for more information.