For advisors
Help a client consider every option before a policy ends.
How are commissions structured in life settlement transactions?
Commissions for agents and advisors in life settlement transactions are typically paid by the licensed provider or buyer once a policy sale successfully closes. The amount of compensation can vary depending on the policy size, the structure of the transaction, and the regulations in the state where the policyowner resides.
How can financial advisors help clients with life settlements?
Financial advisors play an important role in helping clients understand whether a life settlement may be an appropriate financial option. Many seniors are unaware that a life insurance policy can potentially be sold in the secondary market, so advisors often begin by evaluating whether the policy still serves its original purpose within the client’s financial plan.
How can offering life settlements strengthen client relationships?
Offering life settlements helps advisors and agents support clients during an important stage of retirement and financial planning. Many seniors lapse policies without realizing they could receive significant value.
How do advisors identify clients who may benefit from a life settlement?
Clients who may benefit from a life settlement often fall into a few clear categories. In many cases, they no longer need the coverage, cannot comfortably afford rising premiums, are approaching a policy lapse, or have experienced changes in their health, retirement plans, or estate planning needs.
What compliance and disclosure rules apply to agents?
Compliance requirements for life settlements vary by state, but many states require agents to provide specific disclosures when discussing the sale of a life insurance policy. These disclosures are designed to ensure that policyowners understand their rights, available alternatives, and the potential financial and tax implications of entering into a life settlement transaction.
What resources exist for agents to learn about the secondary market?
Agents can learn about the life settlement market through industry associations, continuing education courses, state insurance department trainings, and educational materials from licensed providers.
What role do insurance agents play in the settlement process?
Insurance agents often play an important role in identifying when a client’s life insurance policy may no longer align with their financial goals or current life situation. Because agents typically maintain long-term relationships with policyholders, they are often the first professionals to recognize when a policy has become too expensive, unnecessary, or difficult for the client to maintain.
