Evaluating Companies that Buy Life Insurance Policies

Did you know you can sell all or a portion of a life insurance policy, even term insurance?

(2 minute read)

Evaluating life settlement companies requires understanding the  difference between a direct buyer (Provider)  and a broker. Selling an unwanted or unneeded life insurance policy is a highly-regulated process that can differ from state to state. Here’s what you need to know to evaluate companies that buy life insurance policies and make sure you are working with a qualified and ethical life settlement company.

What Parties are Involved in a Life Settlement?

There are two main parties involved in the transaction of a life settlement. These are brokers and direct buyers also called life settlement providers. 

  • Life Settlement Brokers represent the policyholders who are selling the policy. There are several different types of financial professionals who can broker a life settlement for their clients, including a certified professional accountant (CPA), a wealth manager, an estate lawyer, and more. Since the transaction is regulated, any of these individuals must be licensed in their state to broker the transaction.  An experienced life settlement broker  has the  industry  knowledge and experience to ensure the seller received fair market value in a life settlement transaction. A life settlement broker  generally maintains errors and omissions insurance that covers the provider as well.
  • Life Settlement Providers are companies that  represent the buyers or they can be the buyers themselves. A provider’s mission and fiduciary responsibility is to buy the policies for the least amount of money possible. Their business model is to buy low and sell high.  Going directly to the trusted  advisors and policy owners is a great way for providers to do that. 

It isn’t required that someone work with a broker to sell a policy in a life settlement, but it can be in the seller’s best interest. If a policy owner goes direct, they do so at their own risk. They are not likely to receive  fair market value for their policy. The sale of any large asset can be a complex transaction which requires sophistication and knowledge of that industry. Brokers can help sellers navigate the process and get a great return on the investment of a life insurance policy.  

Qualities of Top Life Settlement Companies

In addition to confirming the life settlement company is licensed, properly bonded, and insured, you should also determine how they will protect your privacy during and after the transaction. Though an investor will now hold your life insurance policy, make sure it’s clearly defined in writing how often there will be check-ins about your health and what information the investor has access to. This is part of the industry regulations and should be addressed by a qualified life settlement company.

Work with Top Life Settlement Advisors

At Life Settlement Advisors, we have over 58  years of combined experience educating clients about life settlements. We share information to build confidence and assurance, and help each policyholder move forward with the transaction only if they are convinced it’s the best decision for them. Licensed, bonded, and insured in all the states where we do business, we are here as a resource for you if you are curious about the possibility of a life settlement to transform your life.

Did you know you can sell all or a portion of a life insurance policy, even term insurance? Selling an unwanted life insurance policy is no different than selling your car, home or any other valuable asset that will create immediate cash. Contact us today to learn more.

Leo LaGrotte
Life Settlement Advisors

Get in touch with Life Settlement Advisors today to take the first step toward converting your policy into cash.
Life Settlement Advisors
Leo LaGrotte
At Life Settlement Advisors, we strive to be a voice of confidence and assurance for our clients. Our goal is to educate you about the life settlement process so you can make an educated decision about whether it is right for you.

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