FORT WASHINGTON, PA — Coventry is urging life insurance policyowners and financial advisers to assess whether existing policies can be sold rather than surrendered or allowed to lapse, positioning the secondary market as an alternative when coverage needs change.
The company said life settlements can provide policyowners with more than a policy’s cash surrender value, making valuation an additional consideration when reviewing coverage that may no longer meet its original purpose.
Americans hold more than $14 trillion of individual life insurance, while hundreds of billions of dollars in coverage is surrendered or allowed to lapse annually, according to Coventry.
“That is an enormous amount of value leaving the market, often without the policyowner ever knowing an alternative existed,” Chief Executive Officer Reid Buerger said. “Before valuable coverage is terminated, policyowners and their advisors should know whether a better alternative exists.”
Coventry said financial professionals evaluating an existing policy should consider its performance, the future cost of maintaining coverage, its available cash surrender value and whether selling the policy in the secondary market would provide a better outcome for the client.
The Fort Washington-based company operates in the secondary market for life insurance and the life insurance-backed asset class.
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