Commercials and ads for life settlements directly aimed at policy owners, at your clients, are becoming increasingly more common.
Unfortunately, without your valued advice and that of an experienced life settlement broker, your clients could very well be making a poor decision, as well as failing to get the maximum value for their policy.
Selling a policy is a critical and an irrevocable decision.
Yes, a life settlement is a creative way to find hidden value in a life insurance policy, but life settlement buyers aim for policies on insureds with impaired health.
As a result, sellers generally cannot qualify for new insurance and therefore, the coverage that is sold can never be replaced.
Clients need your help in taking this important step.
Most clients lack the expertise to make this decision and when they go direct, they are frequently dealing with a company that represents, first and foremost, the buyers of the policies and not your clients.
They have no interest in counseling your clients on the advisability of keeping a policy — in fact, just the opposite!
There are primarily two significant ways a client can go wrong when dealing direct.
First is the threshold keep or sell decision, determining if the policy is still needed, wanted or affordable for them.
Second is whether they are getting the highest possible offer for their policy.
As to the first, the most important thing to know about a life settlement, and be sure that your clients know this too, is that it is an alternative to lapsing or surrendering a policy, not to keeping a policy.
Buyers acquire policies to achieve significant rates of return — returns that, if the policy were retained, could benefit the client's beneficiaries rather than the buyers.
Second, when going direct, they need to understand that it is the buyer's duty to acquire policies for their investors at the lowest possible price.
This is unlike working with you and an experienced life settlement broker, whose duty is to help you sell the policy at the highest possible price.
Robin S. Weinberger, CLU, ChFC, CLTC, is the director of national accounts for Life Insurance Settlements Inc. She has been a general agent and director of national accounts for Connecticut Mutual and vice president of marketing for Sun Life of Canada. She can be reached at 
