Broker Sales Strategies

A flood of financial professionals are entering into the marketplace, including insurance agents, CPA networks, life settlement brokers, estate and financial planners, BGAs, broker-dealers, and insurance entities. This trend has focused more attention on the need for education and resources related to life settlements, including the best way to start a life settlement practice.  The following information outlines seven simple steps to conduct a life settlement marketing program. 

The following steps outline a potential marketing strategy to initiate a life settlement with a client, when appropriate.

Step 1 – Identify Potential Settlement Candidates
Step 2 – Conduct planning meetings with eligible clients and prospects
Step 3 – Suitability
Step 4 – Compile Settlement Case File
Step 5 – Settlement Provider or Broker Selection
Step 6 – Determine Viability and  Market Value
Step 7 – If Agreed, Proceed with Settlement

STEP 1 - Identify potential candidates from existing clientele and prospects.

• Minimum age 65 or older; most viable candidates tend to be females 75+, males 72+
• Policies still in contestability are not applicable; policies must be at least 2+ years old
• Type of policies is typically universal life (individual or survivorship); however, many companies accept other types of policies including whole life, term and variable contracts.  Check with each provider’s pricing parameters to determine types of policies they can purchase.
• Average minimum aggregate face value of polices is $250,000

STEP 2 - Conduct a planning meeting with your client to determine their current insurance needs and review their existing life insurance coverage. Determine if their current coverage amount and the policies continue to meet the needs for which they were intended and if those policies are performing in accordance with the needs and expectations of the insured.

STEP 3 - If it is determined that any or all of coverage is not meeting the performance expectations, then a life settlement transaction may be suitable for consideration and you can recommend that a settlement should be further explored. Other factors such as affordability and current insurability of the client will ultimately also play a factor in determining the suitability of a settlement for each particular case.

STEP 4 - Once you've determined that a life settlement is a viable option, gather relevant medical information, policy information and complete settlement applications and client authorizations.

STEP 5 - Research reputable life settlement providers or brokers to obtain pricing offers of policy's fair market value. Characteristics to look for include:

• Brokers
  • Significant industry experience
  • Extensive state licensing
  • Relationships with top providers in the industry
  • Member of the Life Insurance Settlement Association
• Providers
  • Have transacted at least $1 billion in aggregate face amount
  • Reputable firms solely backed by institutional investors
  • Management team that has experience in life insurance industry
  • In-house legal team
  • Extensive state licensing
  • Member of the Life Insurance Settlement Association
  • High rating by rating agency

STEP 6 - Once market value is determined, work with your client to decide whether a life settlement is a viable transaction for him/her.

STEP 7 - If a life settlement is agreed upon, proceed with the transaction using a broker or direct provider.