If you have an extremely qualified policy, the value of that policy is more than you realize. Selling your life insurance policy directly to a company will certainly put a lowball offer in your lap.
Throw that ball right back. You don’t want it.
Is the process of working with a life settlement broker making you feel hesitant? It’s actually not complicated at all considering you have someone else doing the work for you. Just a little more time to play the field and you’ll walk away with more money in your pocket.
Many life insurance policies can be sold at a certain time. Even if you have a term life insurance policy, you may be able to convert it to a permanent policy and then sell it. However, there are some circumstances that make a policy extremely qualified.
The face value of a policy is the death benefit. This is the amount your beneficiaries receive after you die. If this number is $100K or more it’s easier to sell your policy.
A face value of $100K or more becomes even easier to sell when it’s combined with significant health impairments. You must have paperwork from a doctor proving these health impairments. A broker can help you gather the supporting documents to help you sell your policy.
If you are over 70 years old, regardless of your physical health, your policy is extremely qualified. In this case you’re missing out on an opportunity for more cash by selling directly to a company.
Just like with other asset-selling markets, competition creates higher prices. If you sell your house directly to a company you miss out on the possibility of a bidding war between buyers.
Having an extremely qualified policy is like having the nicest house in the nicest location. A lot of people want to jump on it. If you don’t hire a broker your policy won’t see the market competition. A company can offer you anything without the fear of someone else coming along to take the deal. They don’t expect to compete with anyone.
When you work with a broker they take bids from many investors and that drives the price up. An extremely qualified policy will have a lot of interest and the price will get pushed much higher.
When selling directly to a company, it’s in their best interest for you to not get a lot of money out of the deal. The money you get comes directly from their pockets. Their goal is to make as much money off your transaction as possible.
When you work with a broker, they are financially invested in the transaction similar to you. They’ll get a commission but it’s their job to get you the highest possible offer. And they benefit from that.
Working with a broker is like putting another person on your team. They know what to look for in a policy and they won’t hide it from you. For example, an accelerated death benefit makes the policy significantly more valuable. However, some companies won’t share that with the policyholder.
In Ted Muller’s case, it wasn’t until he spoke with a broker from Windsor that he was made aware of the accelerated death benefit on his policy. Working with Windsor put someone else on his side to fight for him. It’s all about making the smartest moves when selling your life insurance policy.
How’s that for throwing a wrench in things? The people who provided you with a life insurance policy in the first place do not want you to sell it. They will drag their feet to make the sale harder for you. They want you to believe this is all just too complicated.
But they make their money off policies lapsing. They want to do what they can to avoid paying the death benefit.
A broker will deal with the foot draggers. They have experience working everything out. Working with a broker takes the headache away from you.
The process of working with a broker when selling your life insurance policy starts with a free consultation. During this consultation, the broker will go over the details of your policy and all of your options. In some situations, even if the policy is extremely qualified, a life settlement may not be right for you.
If you decide to move forward with the broker, they’ll get to work gathering your documents to prepare your policy to go to market. This includes getting medical records from your doctors to support your policy information.
Many brokers request exclusivity. This means you can only work with one broker. This is in the broker’s best interest as well as yours. Investors don’t want to see the same policy on the market represented by different brokers. This looks less genuine and can spook potential bidders.
A broker will take bids on your policy, organize the competition, and then present you with the highest offer. It’s then up to you to accept the deal.
Working with a broker will take more time than selling directly to a company. Selling a policy on the market may take 30-90 days. If you need cash immediately for an emergency then working with a broker may not meet your goals.
However, if your goal is to maximize the money you walk away with, you need a broker.
If you’re considering selling your life insurance policy, start with a life settlement calculator. Then reach out to us so we can discuss your policy and options. You don’t need to be sure that you want a life settlement before reaching out. The more you know the more likely you’ll be able to make the best financial decision for yourself and your family.
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