FairMarket Advisory Services, LLC (“FairMarket Advisors ”) is the perfect solution for the client determined to surrender their policy. FairMarket Advisors provides a way for owners of qualifying whole life or indexed universal life insurance policies to get some up front cash, keep their policy in force, and avoid a “tax time bomb.” FairMarket Advisors is the exclusive national distributor of a proprietary and revolutionary loan program, (the “Loan for Life™”) designed in conjunction with Cash Value Lending Corp. (“CVLC”) to provide these policy owners with a new, and better, option than surrender, sell or stand still. CVLC expects to allocate between $200 – $500 million (depending upon market demand) for policy loans through 2022.

Instead of surrendering or selling the policy, policy owners can now take out a loan arranged by FairMarket Advisors against their own policy—using the cash value as the sole collateral for the loan. Policy owners get the same cash at loan closing (less only the lender’s arrangement fee) as they would from a surrender. BUT they don’t have to pay taxes on any inside gain, they don’t have to worry about paying future premiums on their policy, and they even get to keep the tax-free death benefit for their heirs (less only the amount needed to satisfy the loan.) The lender keeps the policy in force for “the life of the policy,” the earlier of the policy maturity date, or death of the insured(s). The policy owner continues to be the sole owner and to designate the beneficiary. 

The loans offered through FairMarket Advisors have a fixed interest rate throughout the entire term of the loan. The policy owner has the right (but no obligation) to prepay the loan at any time and to pay interest currently. Or elect to accrue the interest throughout the full term of the loan. 

No matter how long or how much the loan grows to be worth, clients won’t ever owe more than the policy death benefit can cover and the lender guarantees that the policy owner’s beneficiary will always receive at least a fixed minimum amount of the death benefit. The loan is also recourse ONLY against the policy, meaning that the policy owner never has to worry about someone knocking at their door demanding payment. The policy itself is the only asset that will be used to repay the loan.

This compelling new option for cash value life insurance owners provides “living benefits plus.” You likely have clients that could benefit from the added financial freedom it provides.