Top 5 Reasons to Recommend a Life Insurance Policy Appraisal

5 Top Reasons for Life Policy Appraisals that Take Advantage of Inappropriate Coverage.

For insurance agents who haven’t yet counseled their clients about life insurance policy appraisals, here are the five top reasons to recommend an appraisal today.

If a client is planning to let a policy lapse. If a client is considering letting a policy lapse, it turns into a huge lose-lose scenario for the agent. First, the agent will stop earning residual income on the policy, and second, there’s a huge risk that that agent will lose their connection to their client. Agents should always suggest a policy appraisal if a client says they may let their policy lapse. The appraisal offers a new option for the client but also helps preserve the relationship.

If a client is worried about current retirement expenses. For clients who are currently retired and concerned about paying their bills, a policy appraisal can gauge whether their policy can be sold on the secondary market to provide new source of income. The policy appraisal gives a quick snapshot which becomes a powerful decision-making tool. Many seniors are sitting on insurance policies and have no idea that the policies have value. Offering an appraisal can bring options that they didn’t know they had.

If a client is concerned about paying medical bills. For clients who are ill and facing major medical bills, a policy appraisal is the first step to selling that policy on the secondary market. We know that medical costs continue to skyrocket and severe illness can even destroy the financial wellbeing of a family – a phenomenon known as financial toxicity. Many clients don’t know that an appraisal is an option, and even fewer know that they can also sell just a portion of a policy. Using a planning technique known as retained benefits, a client sells part of their policy as a life insurance settlement while keeping part of the policy in force for their beneficiaries. Clients can sell part of a policy to pay their current medical bills and still have money left over for a beneficiary who might be a spouse or a child or someone else. Yet until they understand the value of the policy, they can’t make a smart decision.

If a client has COVID-19 anxiety (and who doesn’t). Financial uncertainty from COVID-19 is impacting nearly everyone. Clients need to have an understanding of the value of their assets. Because life insurance is thought of as something you pay for each month, many people look at it as a liability – when it is actually an asset. Its value can be leveraged and used for different purposes that have already been discussed. A policy appraisal helps your client know the value of this asset so that they can make an informed financial decision during this time of great uncertainty.

If you believe your client should have options. If you have a client’s policy appraised, you can bring them options and take an active approach to help them plan for the future. While they may not act on an appraisal right away, the agent comes out on top by being proactive. Suggesting an appraisal gives an agent another reason to stay in contact with a client and ultimately offers a potentially lucrative planning option. Providing value as an agent is a constant challenge, and the options afforded by an appraisal are likely not being offered by any other financial services representative in your client’s orbit.

if you’re interested in learning about life insurance policy appraisals please contact us. And you can also send us text messages via our website to answer any questions.

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