The reasons to seek out a life settlement are numerous. Perhaps you want a little extra cash to pay for unexpected expenses. Or maybe you want to take a trip with your loved ones and could use the money from a life settlement to do everything you want. Or perhaps you’re just tired of paying your life insurance premiums.
Whatever the case may be, trading your life insurance policy in for a life settlement can be a great way to acquire some extra money. Before starting your search for different life settlement companies, though, it’s important to understand the difference between life settlement providers and brokers. They both play a significant role in the life settlement process, and knowing the difference between the two can make a huge impact on how much money you receive.
What Is a Life Settlement Provider?
A life settlement provider is a person or company that purchases your life insurance policy or represents someone who does. In addition to paying you for your policy, the provider must also pay your monthly premiums until you pass away. Upon your passing, they will receive the death benefit for your life insurance policy.
While it is possible to acquire a life settlement for your insurance policy directly from a provider, it isn’t always ideal because your payout may end up smaller than it could’ve been. That’s because the provider, when purchasing on behalf of someone else, has a fiduciary responsibility to purchase a policy at its lowest possible value. They do so by purchasing the policy directly from you rather than competing against other life settlement providers. If you want to get the most out of your life settlement, you should consider working with a broker.
What Is a Life Settlement Broker?
A life settlement broker is a person or company that assists you, the policyholder, in selling your life insurance policy. They will start by assessing your eligibility for a life settlement. If you qualify, the broker will then research providers that you can sell your life insurance policy to. They will present their findings to you, including how big of a payout you might expect from each provider. Life settlement brokers often collaborate with providers who exclusively purchase policies through brokers. By working with a broker, you open the door to these additional selling opportunities.
Ultimately, a life settlement broker has your best interest in mind when pinning down potential providers. With their extensive knowledge and experience, they strive to secure the most money they can on your policy—usually 4-7 times the amount of your policy’s surrender value. Life Settlement Advisors is one example of a broker that has over 50+ years of combined experience in educating policyholders and their financial advisors about life settlements. Once you start the life settlement process with us, we’ll send you weekly updates on where in the process you are.
What Is the Difference Between a Broker and a Provider?
There are some major key differences between a life settlement broker and a provider. To clarify these differences, let’s answer a few basic questions about them.
How are they involved in the life settlement process?
- Provider: They either buy or represent the person or company who buys a life insurance policy in exchange for a life settlement.
- Broker: They guide the life insurance policyholder in figuring out whether they qualify for a life settlement and who to sell their life insurance policy to.
Whose best interest do they have in mind?
- Provider: The individual or company who is buying the life insurance policy
- Broker: The individual selling the life insurance policy
How do they make money?
- Provider: They receive the death benefit once the life insurance policyholder passes away.
- Broker: They receive commission, meaning a percentage of what the policyholder receives from the life settlement.
Life settlement providers and brokers are not the same, and it’s important to understand the distinction between the two before you apply for a life settlement. To ensure that you receive the most profitable offers from the best life settlement companies, then you need to work with a broker like Life Settlement Advisors.
Don’t Settle for Less. Turn to Life Settlement Advisors
The reason many people cash in their life insurance policy is to receive a lump sum that they can use for bills or things they enjoy. With Life Settlement Advisors, you can be assured that we’ll do our best to get you the most possible money for your life settlement. You won’t find a broker with better service out there than what we have to offer. We’ll walk you through whether you qualify for a life settlement and verify that you stay up to date through every step of the settlement process. To start your journey, use our life settlement calculator to see whether you could qualify for a life settlement.