Navigating the Life Settlement Market
The life settlement market is simply a marketplace of life settlement buyers. Life settlement buyers are looking for life insurance policy owners that may benefit from the possibility of getting cash immediately. If you are a qualified candidate, you may find that selling your life insurance policy to a life settlement buyer may unlock a hidden value in your policy.
In order to sell your policy, life settlement brokers often compile and review your medical history and the costs of keeping your policy in force. Upon reviewing this information, and once life settlement brokers contact your insurance company to learn the particulars of your policy, you should know if you are likely to qualify. If you are a qualified candidate, your life insurance policy is now in a favorable position to be bought by a life settlement buyer.
Life Settlement Brokers typically take up to 30% of the value you receive from life settlement buyers. You can sell your policy directly, without a broker and save the fee, but you need to be careful. Life settlement buyers have no fiduciary responsibility to you, the seller, and life settlement buyers are typically trying to purchase policies for the least amount of money they can pay for them.
As a seller
you want to get the most value out of your life insurance policy. Life settlement buyers are often able to provide you with more cash than if you use life settlement brokers. This is because life settlement providers work directly with sellers and buyers and when there is no life settlement brokers in the equation, you can often times come out way ahead on your net offer for
your life insurance policy.
Life settlement brokers could charge a sellers fee of up to 30% of your life insurance cash settlement value but are responsible to you and must disclose their fees in most states. Life settlement providers represent the sellers, but will often negotiate directly with you, especially if you have another bid. If you find that you are qualified to sell your life insurance policy, it may be in your best interest to shop around in the life settlement market and get an estimate from more than one buyer before you ultimately decide to sell, even if you are using a life settlement broker.
Life settlement brokers are supposed to shop your policy to qualified licensed buyers in your state, but they do not always shop the policies as widely as they should. Considering the amount of money you pay to the broker for the service, you can often come out way ahead by selling direct, but you need to have some semblance of the value of your policy and that is not always easy for someone to get.
We recommend that you have your policy independently appraised before you attempt to sell it. Getting a direct offer from a licensed life settlement buyer only requires that you have a policy illustration and either your medical records or a health questionnaire. You are absolutely under no obligation to sell your policy to anyone and you should pay no fees for someone to value and shop your policy.