Most life insurance policy holders do not treat their life insurance as an asset. However, the equity the builds up through the years can be quite substantial. Many policy owners are unaware that they even have this equity that has built up in their policy.
In its simplest terms, the secondary market for life insurance means that policy owners no longer have to accept surrender value or cash value for their policy. By selling their 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 some basic information about the policy and the insured’s medical records, the adviser can learn what the policy owner would likely receive, either as a cash payment or to retain a portion of death benefit with no future premium payments.