If you’re wondering, “How do I sell my client’s life insurance policy?” you’re not alone. Financial advisors, attorneys, trustees, and even life insurance agents often find themselves in situations where a client no longer needs or can no longer afford their life insurance policy. In such cases, a life settlement can provide a valuable alternative to surrendering the policy or allowing it to lapse. By selling a life insurance policy on the secondary market, your client may receive significantly more than the cash surrender value offered by the insurance company.
Understanding Life Settlements
A life settlement involves selling an existing life insurance policy to a third-party buyer, typically an institutional investor. In exchange, the policyholder receives a lump sum payment that is higher than the surrender value but less than the death benefit. The buyer assumes responsibility for future premium payments and becomes the policy’s beneficiary.
To qualify for a life settlement, the insured typically needs to be at least 65 years old, and the policy must have a face value of at least $100,000. However, younger individuals with serious health conditions may also be eligible.
Steps to Selling Your Client’s Life Insurance Policy
- Assess Eligibility – Determine whether the policy qualifies for a life settlement. Factors such as the insured’s age, health, policy type, and death benefit amount will influence eligibility. Policies with features such as no lapse guarantees can be especially appealing to investors.
- Obtain a Policy Valuation – A life settlement company can evaluate the policy’s potential market value based on actuarial and financial factors.
- Gather Necessary Documentation – Required documents include the insurance policy, policy illustration, and medical records of the insured.
- Solicit Offers from Buyers – Policies can be sold through life settlement providers, life settlement brokers, or they can be sold directly to buyers. If a client chooses to use a broker, make sure that they make themselves aware of any broker fees that may need to be subtracted from their offer.
- Review and Accept an Offer – The client should review any offer presented to them and decide if they would like to sell their policy for cash.
- Complete the Transaction – Once an offer is accepted, legal paperwork is completed by a licensed provider, and ownership of the policy is transferred to the buyer. The client then receives their lump sum payment.
Benefits of a Life Settlement for Your Client
- Higher Payouts – The settlement value is typically much greater than the policy’s surrender value.
- Financial Flexibility – Clients can use the funds for medical expenses, retirement, or other financial needs. There are no restrictions on funds.
- No More Premium Payments – Selling the policy relieves the client from ongoing premium obligations.
Considerations for Agents
Many life insurance companies discourage or outright forbid their agents from mentioning life settlements or assisting clients with the process. If you’re an agent facing such restrictions, referring your client to Viatical.org can be a beneficial alternative. We work directly with policyholders, ensuring they receive a direct offer for their policy. Additionally, anyone can receive a referral fee for connecting a client who qualifies and completes a sale with us.
Working with Our Direct Platform
Choosing an experienced life settlement company is essential. We have been helping policyowners access the hidden value in life insurance for nearly 20 years. All life settlements and viatical settlements purchased by our direct buyers are closed by an experienced licensed provider in your client’s state.
Selling a client’s life insurance policy can be a strategic financial decision, providing them with immediate cash while eliminating premium payments. Understanding the life settlement process and working with a trusted life settlement company ensures that your client has the tools they need to sell their policy if value is found. If you’re interested in exploring this option, consider reaching out for a no obligation policy appraisal to learn if they qualify. 800-973-8258