If you have a life insurance policy you no longer want or need, you may be interested in a life settlement. In a life settlement, you sell your life insurance policy to an investor. You receive a one-time lump sum payment that is typically higher than the surrender value but lower than the death benefit. In return, the investor takes over paying your premiums and becomes the beneficiary to the death benefit.
Because life settlements are a financial transaction, they involve various types of life settlement companies and organizations, like providers and brokers. But what exactly are life settlement providers and brokers? And how do you find the best of the best to work with? Keep reading to find out more.
What Is the Difference Between a Life Settlement Provider and a Life Settlement Broker?
While a life settlement provider purchases life insurance policies, a broker works on behalf of policyholders to collect offers and negotiate the sale of a policy. Here is some additional information about each of these roles.
What Is a Life Settlement Provider?
A life settlement provider is an organization that purchases a life insurance policy via a life settlement. This provider may purchase a policy directly from the policyholder, but often they work with a broker to buy the policy. Life settlement providers typically act on behalf of investment companies that include these life settlements in their clients’ diversified portfolios.
During the life settlement process, the provider makes an offer on the policy. Should the offer be accepted, they make a one-time payment, begin paying the policy premiums, and ultimately collect the death benefit at the time of the policyholder’s passing.
What Do Life Settlement Brokers Do?
A life settlement broker is an individual or company that works on behalf of a policyholder to secure offers for a policy. Essentially, brokers walk policyholders through the entire process of selling their life insurance policy, which includes:
- Learning more about the life settlement process and if it’s a good option
- Understanding the qualifications of a life settlement
- Filling out an application for a life settlement
- Having the application reviewed by third-party underwriters
- Shopping the policy around on the market
- Presenting the policyholder with offers
- Helping the policyholder fill out the appropriate paperwork to sell the policy
While that may sound like a lot, one of the many reasons people search online for a “life settlement broker near me” is because brokers help take the guesswork out of the entire process. Doing so helps ensure that the process is as smooth and efficient as possible.
How Do I Choose a Life Settlement Provider?
The best way to choose a life settlement provider isn’t doing it on your own, it’s working with a life settlement broker who can act on your behalf to secure the best deal possible. While it is possible for you, as a policyholder, to work directly with a provider, without industry knowledge it’s difficult to determine whether you’re receiving a fair offer or not. Working with a broker will provide information and transparency into the process so you can feel confident in your decision.
The question then, shouldn’t be about the best company to sell your life insurance policy to, it should be about who are the best life settlement companies or brokers to do business with. Here are a few tips to help you find a quality, trustworthy broker.
- Does the broker offer free consultations? As a financial transaction, a life settlement isn’t something you should enter into lightly. It’s important to consider your unique situation to determine if it’s the right move for you. The best life settlement brokers understand this and offer free consultations to help you make your decision.
- Is the broker willing to educate you? There are several key steps that go into a life settlement, and you’ll likely have questions before you begin as well throughout the process. The right life settlement broker understands this and will provide you with the education and information you need to feel comfortable at each step.
- Does the broker have industry experience? You want a life settlement broker who has experience and a proven method for educating clients about the process, shopping the policy around, and receiving offers. Life settlements are a niche industry, so it’s essential to find someone who understands the details.
- Is the broker transparent and clear throughout the process? Like with any financial move, it’s imperative that you find a broker who is honest and open throughout the process. There shouldn’t be any unanswered questions or doubts on your end.
- Does the broker respond in a timely manner? The best life settlement brokers know that a life settlement is an important financial move. They should answer your inquiries fully and within a reasonable time frame. In other words, look for a broker who cares about your experience as a client.
Life Settlement Advisors: Life Settlement Brokers You Can Trust
When you’re considering selling your life insurance policy, you want a life settlement broker who will work with your best interest in mind. With more than 50+ years of combined experience, the team at Life Settlement Advisors strives to offer educational information and sound advice so that each of our clients can feel confident in the decision they make.
Ready to get started? Find out more about the life settlement process on our website. Once you’d like to move forward, take the first step by filling out our free life settlement calculator today.
