Life Insurance Case Study: What to Do When Clients Need Fast Cash

Life Insurance Case Study: What to Do When Clients Need Fast Cash

Today we hear from Lisa Rehburg, president of Rehburg Life Insurance Settlements.

She discusses the tragic case of two clients: a married couple facing a crisis. The husband, in his late 50s, was diagnosed with a terminal illness and given six months to live. The couple considered a life settlement that involved selling his $500,000 life insurance policy for $380,000. They needed cash immediately and consulted Rehburg to see if it was a good deal.

It’s common today for clients to sell unwanted life insurance policies for a lump sum of cash. If often makes good sense and the market is vibrant. However, Rehburg warns that this tactic sometimes doesn’t suit the client’s true interests. Let’s examine how she approached this delicate case.

She started by asking herself a few pertinent questions. Why did the couple want to sell the policy? For a simple reason: they had major bills to cover and no other way to pay them. Could the policy be changed into a whole life plan with critical illness or accelerated death benefits? No, that had been tried and refused by the carrier. 

Rehburg came up with two potential solutions. First, a loan could be taken against the policy’s death benefit – there are companies that specialize in this sort of arrangement. Second, she conceived what she calls a more creative solution: a group offered to pay around $200,000 outright for the policy and include a $250,000 death benefit. This variant features a sliding scale: the longer the client lives, the less his widow will receive, but in any case the sum is substantial. 

When the article was written, the stricken client was still alive and deciding which option to choose. By employing her imagination and skill, Rehburg had provided just that: a choice where none had been present.

For more information, please read:
A Life Insurance Settlement Lesson in Creativity | ThinkAdvisor

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