If you are a life producer and are wondering whether life settlements are a valuable tool, the answer definitely is yes. Many Top of the Table producers use our services to propel their production by replacing policies that are being sold to life settlement companies. Few top U.S. producers haven’t enjoyed the benefits of a life settlement transaction. In 2005, an estimated $15 billion in life settlement transactions will occur in a market estimated at $100 billion. It is a good idea for you to get up to speed right away on these products if you aren’t already there.

The life settlement industry began about 10 years ago to the delight of many seniors. Because many seniors are living much longer than they ever planned, a life settlement transaction often can enable them to live the rest of their lives with the dignity they deserve. I have seen many top producers’ clients lose their spouses and not even know how to balance their checkbooks! In many situations, the senior becomes depressed and may spend too much money on grandchildren and traveling just to try to feel better.

This can create a giant mountain of uncertainty because of credit card balances and home equity loans. And it can lead to more depression!

What is one of the first things these seniors have to change? Either they cannot afford their premiums on their life policy or they call their financial adviser to inquire about a reverse mortgage. If you are helping your client manage his or her finances, you need to be educated about life settlements as an effective solution. For example, we helped a widow with a $2 million UL policy gain a settlement because she owed $46,000 on her credit cards and had two mortgages on her house. The producer was able to rewrite the client a new $1 million policy and give her a settlement on her old policy that enabled her to pay off her credit cards and her mortgage balances. Now this producer can do no wrong in the client’s eyes. With the population of the U.S. aging so rapidly, we expect this scenario to repeat itself every day. Life settlements provide real life solutions that can change clients’ lives now.

Our company is in New Jersey, within 60 miles of the Atlantic City casinos. An elderly client fell hard by going to the casinos daily after his wife died. In six months, he lost $800,000! It was no surprise that after a major hit in the stock market a few years ago, earning low rates on his savings, and taking an $800,000 clubbing in the casinos, this man needed his finances put in order fast. Thank goodness he owned a $5 million universal life policy that his producer presented for a life settlement. The sale netted him $1.2 million to help him recover from his “bad luck.” Then the producer wrote a $2 million policy for him to keep his financial planning intact. Your clients deserve access to this fine wealth-building tool.

One of the questions I’m asked most is, “Who owns my policy?”

Most policies remain in a trust and are used to strengthen balance sheets for companies that are looking to get better credit ratings, which in turn give them lower borrowing costs to conduct their everyday business. This strategy helps these companies generate more profits — another benefit of life settlements. Meanwhile, lives covered under these policies are tracked by the Social Security system, which will notify the trust of their demise via their Social Security number. The client who has sold the policy can forget about the transaction after it is completed. Most clients never are contacted after a transaction is completed.

In summary, a financial planner or life producer might be hard pressed to find a planning tool that can offer more value to their senior clients, especially those in financial distress. The client’s dignity can be restored using this strategy. Now is the time to educate yourself on the life settlement industry. There are three winners in every life settlement transaction: you the producer, your client, and the owner of the policy after the sale.