Direct Buyer vs Life Settlement Broker

Important Differences Between A Life Settlement Broker And A “Direct Buyer”

Not Happy With Your Life Settlement Offer? Consider Hiring A Life Settlement Broker.

Chicago, IL It happens several times a week at the Windsor Life Settlement broker office. A life insurance policyholder calls on a hunch that their life settlement offer from a direct buyer was too low. Most of the time they are correct.

For example, recently someone called on behalf of their mother, an insured with the following policy:
– Age: 85
– Face Amount: $650,000.00
– Health Status: Significant Impairments

Low-ball offers from direct buyers topped out at $100K.

To be clear, a direct buyer offers value to the life settlement market by saving the policyholder time. That is no small thing because many people seeking life settlements intend to use their life settlement funds for medical bills or emergency funds. So, when a person sells their life insurance policy for cash to a direct buyer, they bypass the standard 3-month life settlement timeframe normally required to sell most policies. Additionally, selling a life insurance policy to a direct buyer means there is no commission owed to a life settlement broker.

We have all heard the saying ‘You get what you pay for’, and this can be true in the life settlement industry as well.  A direct buyer is purchasing a policy for their own portfolio which means they are going to try to get that policy for as little cash as possible.  A direct buyer is working for their own company or portfolio – they are not working for you.

A life settlement broker works for you, the seller.  A broker’s job is to get the highest possible offer for your policy by presenting the case to as many buyers or investors as possible.  This approach of ‘leaving no money on the table’ is what Windsor strives for!

In the case example above, an insured who is 85 years old with significant medical impairments, a 15% offer is a low offer ($650,000 x 15% = $100,000). In this case, hiring a life settlement broker would be advisable, and policyholders are encouraged to find a broker they are comfortable with, who is upfront and transparent in the entire process.

A life settlement broker gathers all the documents needed to bring a life insurance policy to market, where it can welcome bids and offers from multiple interested buyers. This process will typically yield a significantly higher cash offer for a life insurance policy.

Understanding all the options on the table is so important when seeking a life settlement. For some insureds, taking advantage of an Accelerated Death Benefit might be the best option. For other policy-owners, making a decision to go to direct buyers or a life settlement brokers can mean significant cash.  As a broker, Windsor Life Settlements will always obtain the highest possible bid through our ‘auction-type’ bidding process.