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Life Health > Life Insurance > Life Settlements

What to Tell Your Clients About Life Settlements Now

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Suddenly, it seems like commercials and ads for life settlements are everywhere. And with this media blitz, there is growing misinformation as well. For example, a healthy 68-year-old female cannot sell her $500,000 universal life policy for $300,000. But, you owe it to your clients to be sure that they are aware of this option and that they have the facts to make good decisions.

The most important thing to know about a life settlement, and to be sure that your clients know, is that it is an alternative to lapsing or surrendering a policy.

With the economy turned upside down, your clients should be evaluating all their assets to see what to keep, what to reposition, what needs to be liquidated to pay for everyday living expenses and where they could find unexpected value. Yes, a life settlement is a creative way to find hidden value in a life insurance policy; however, your clients’ life insurance could also be the most valuable thing in their portfolio to keep, assuming that they can afford it, as the face amount will pass on to their beneficiaries no matter what the condition of the stock market.

(Related: Sell Now or Sell Later: Life Settlement Decisions)

Once someone has made the decision to sell their policy, it’s imperative that they know to go to someone that they trust to get them the maximum market value. Selling a policy is somewhat like buying a diamond. It’s a “blind item” and you have to trust the dealer! As your clients’ trusted advisor, you want them to come to you to help them with this transaction.

And, as your trusted life settlement resource, a good life settlement broker will fight to get your clients the most value. Here’s how we do that:

● Life settlement brokers are brokers, and, as such, they go to the marketplace of potential buyers to create an auction which forces up the price.

Recently, we have done several deals where we have had over 20 bids back and forth among providers (the brokers for the investors), squeezing out every last dollar of value. If your client’s policy goes to only one provider, there’s no incentive for that provider to pay top dollar as there’s no competition.

● Life settlement brokers are life insurance professionals, which is their “secret weapon” as they understand how to position the insurance policies to look as favorable as possible to buyers.

So, what do you tell your clients? First, you want to be sure that they are aware of the possibility of selling their policy, before it lapses or before they surrender it. You then want them to know that that they should come to you, and not to a stranger who’s ad popped up on their social media, and why you will be able to help them maximize the value of their policy.

To help you do that, a good life settlement broker must be available for conference calls with you and your clients, and with their accountants and their attorneys.

In addition, a good life settlement broker will have a library of articles available that you could share with your clients.

Finally, a good life settlement broker should have a sample letter that you can send out to your clients to let them know of the possibility of selling policies that they no longer want.

To get a copy of ours, you can email or call us.

This is a time unlike we have ever seen in our lives. There are no words for the devastation that the coronavirus has and is causing and how it impacts all of us. The most important thing is the continued health of our family and friends and of our clients too. Be well, stay safe and take care.

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Robin S. Weinberger

Robin S. Weinberger, CLU, ChFC, CLTC, is the director of national accounts for Life Insurance Settlements Inc. She has been a general agent and director of national accounts for Connecticut Mutual and vice president of marketing for Sun Life of Canada. She can be reached at [email protected] or (617) 451-3343.

Peter N. Katz, JD, CLU, ChFC, RICP, is a life settlement broker and co-director of national accounts with Life Insurance Settlements Inc. He is also a consultant specializing in life insurance advanced sales illustrations, and he has served as an advanced markets attorney and in product development. He can be reached at [email protected] or (860) 937-2936.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.