Life Settlement Brokers: Get The Most Out Of Your Policy

Life Settlement Brokers: Get The Most Out Of Your Policy

Offers are pushed higher when buyers compete for your policy.

If You're over age 75 or Have A Terminal Illness, Don't Settle For Low Offers.

You’re considering selling a life insurance policy for cash.  Early in the process, a company has likely already made an offer that seems low. Before you agree to sell, consider a quote from a licensed broker. Life settlement brokers have relationships with same companies that buy policies directly but also utilize a private network of buyers to secure additional offers on your behalf. Hiring a broker ensures that all of these interested parties are aware of and actively bid for your policy.  Even after the broker’s commission is paid, this process consistently produces higher final offers for the policyholder.  

Case Study: A Recent Life Settlement

A recent case of an insured with the following policy:

  • Age: 85
  • Face Amount: $650,000.00
  • Health Status: Significant Impairments

The Offers

Early in the process, offers from direct buyers reached 15% of the face amount, for a total offer of $97,500.

After reviewing the policy using Windsor’s life settlement calculator, the brokers at Windsor projected this policy may secure offers between $208,000 and $468,000.

In this case, an 85-year-old with medical impairments secured a higher offer by hiring a life settlement broker.  By allowing some time for the brokers to field multiple bids, the final offer far exceeded the initial offer of $97,500, even after the broker’s commission was paid.

new regulations aim to increase transparency in the life settlement market

Why Are there Life Settlement Brokers?

When policyholders sell their policy to a company directly, the offers tend to be lower.  This is because it’s in the buyer’s best interest to secure the policy for the lowest amount possible.

A life settlement broker, however, has a fiduciary responsibility to secure the highest offer possible. When considering a broker’s commission, and the financial investment a broker makes into each case, it’s in the broker’s best interest to secure the highest amount possible on behalf of the policyholder.

In most cases, hiring a professional to represent your policy will result in better offers, and a final cash payment that far exceed the initial offers, even after the broker’s commission is considered.

A broker is a licensed professional who prepares, markets, and negotiates life settlement bids on your behalf. These bids often come from both the same major companies with whom you may have already spoken, but also a private network of buyers that’s been curated by the brokerages over time.

Windsor has an established network of buyers that have consistently provided higher offers for clients. 

Life settlement brokers represent a policyholder’s interest during what is a very important financial experience. Broker’s ensure there is competition for a policy, but also take on the legwork required that save policyholders significant time and stress.

The Right Broker Will Invest Their Own Funds Into Their Clients

To sell a life insurance policy for the highest amount possible, gathering medical records and the information needed to prepare a policy for offers is usually required. This is normally a time-consuming and costly part of the process. The right broker will alleviate the policyholder of this entire process and will even cover the costs.

The fees to secure the required documents usually range from $2,500-4,000. The broker will cover these expenses for their client making them now financially invested in your case. This is just another reason that policyholders feel good about hiring a broker.  Being financially invested in their clients provides a feeling of genuine partnership in what can be a challenging process.

The Broker Process – What To Expect

Start With A Consultation

Consultations are always free so you don’t need to be sure about anything before you contact us. Together we will map out the best path forward, even if that path doesn’t include a life settlement. 

Brokers won’t take on policies they don’t believe will sell for a high amount relatively quickly. Even though they’re looking for clients, they won’t start the process if it’s not a smart or viable option everyone involved.

Questions a broker will go over with you:  

  • How much are the current premiums? Are the premiums increasing?
  • Are there any alternatives to consider? Such as an “accelerated death benefit” rider that could potentially be of more value than a life settlement?
  • How significant if at all are the life settlement tax obligations?

Once your broker has gathered the documents to list the policy, it goes out to market. Investors will actively bid on the policy driving up the price. This process in the market may take 2-4 weeks. 

Once a broker is financially invested, they may request exclusivity. The life settlement community is small. When buyers see the same case being represented by multiple brokers it can spook them.


Attaining The Highest Offer And Closing The Deal

Your broker will find you the highest offer, and you’ll have the final say in accepting the deal. If you accept the offer, funds will move to an escrow account. Next, closing documents will be prepared to transfer ownership of the policy. 

Once the life settlement transaction is signed and finalized the funds will be released to you, the policy owner. You’ll receive the payment in full immediately.

What Life Insurance Policies Are Qualified For Life Settlements? 

If you’re considering a life settlement, start by using a life settlement calculator to see if your policy qualifies for a settlement. Keep in mind you must have these three elements to qualify for representation at Windsor Life Settlements:  

  1. You must be at least 75 years old or have significant health impairments such as a terminal illness. 
  2. The face amount of your policy should be at least $100K. 
  3. The policy needs to be in force for at least 2 years, a few states require 5 years.

There are a lot of factors that determine how much your life insurance policy is worth. For more information on the factors that influence your policy’s worth check out What’s My Life Insurance Policy Worth? 


Read This before Allowing A Policy To Lapse

Life insurance companies benefit from lapsed policies. 88% of all universal life insurance policies are lapsed or surrendered. In this situation, the insurance company gets out of paying a death benefit. With life settlements, the death benefit must be paid. 

Consequently, life insurance companies resist the process of life settlements. Nevertheless, the best life settlement brokers help move the process along.

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